Bitcoin price today: Retreats to $70k as strong dollar limits gains

  • Investing.com
  • Cryptocurrency News
Bitcoin price today: Retreats to $70k as strong dollar limits gains
Credit: © Reuters.

Investing.com-- Bitcoin price slipped on Wednesday amid persistent strength in the dollar and recent data indicating a slowdown in capital flows into crypto suggests a growing caution among investors towards the market.

Bitcoin fell 1.26% over the past 24 hours to $70,194.9 by 08:38 ET (12:38 GMT). It had risen as far as $71,000 on Tuesday.

Bitcoin price capped by strong dollar, more rate cues awaited

Strength in the greenback limited any further gains in Bitcoin, as traders remained largely biased towards the dollar ahead of more signals on U.S. interest rates. The dollar index remained in sight of a one-month high on Wednesday.

Recent dovish signals from the Swiss National Bank and the Bank of England saw traders largely favor the greenback as the only high-yielding, low-risk currency, at least until the Federal Reserve begins cutting interest rates.

PCE price index data- the Fed’s preferred inflation gauge, is set to offer more cues on that front later this week. Any signs of sticky inflation could factor into a more hawkish outlook for the Fed, presenting potential delays in its plans to begin cutting interest rates.

Key Fed officials- Chair Jerome Powell and FOMC member Mary Daly- are also expected to speak later this week, potentially offering up more cues on interest rates.

The prospect of higher U.S. interest rates, at least in the interim, saw traders prefer safer trades into the dollar over Bitcoin, especially given that the cryptocurrency tends to come under pressure from a high-rate environment. Rising interest rates through 2022 sparked steep losses in Bitcoin, with the token sliding to lows of around $15,000 in late-2022.

The world’s biggest cryptocurrency had since staged a nearly five-fold recovery from 2022 lows, and recently clocked record highs of over $73,000. A bulk of Bitcoin’s recent gains were driven by the U.S. approval of exchange-traded funds that directly track the token’s price.

But recent data from digital assets manager CoinShares showed that capital flows into Bitcoin ETFs slowed in recent weeks, while sustained outflows from the Grayscale Bitcoin Trust (BTC) (NYSE: GBTC) ETF applied some selling pressure on the token.

Bitcoin ETFs saw seven stellar weeks of outsized inflows, as the recent approval of spot ETFs drove traders en-masse into the token. But these inflows slowed in the past week, especially as investor sentiment grew more skittish amid uncertainty over U.S. interest rates.

Hong Kong asset management firm applies to launch spot Bitcoin ETF

Elsewhere, asset management firm VSFG, in partnership with Value Partners, has submitted an application for a spot bitcoin ETF to the Securities and Futures Commission (SFC) in Hong Kong

This move follows a report by Bloomberg indicating that the SFC may soon permit in-kind creations and redemptions for such ETFs in the upcoming quarter.

Coming on the heels of the U.S. approval for spot bitcoin ETFs in December 2023, Hong Kong regulators have also opened the door for spot crypto ETF applications.

Earlier this year, Harvest Global Investments, a leading asset manager in China, reportedly submitted the first application for a spot bitcoin ETF with the SFC.

According to local reports, up to 10 financial institutions are preparing to apply for rolling out bitcoin ETFs in Hong Kong.

Three decentralized AI companies to merge tokens

In other developments within the crypto sphere, Fetch.ai, SingularityNET, and Ocean Protocol are joining forces in a move to merge their tokens and form an alliance dedicated to decentralized artificial intelligence (AI).

Announced via email on Wednesday, their aim is to forge an AI collective that stands as a decentralized counterpoint to the dominant models overseen by big tech firms.

The collaboration will see Fetch.ai's token (FET) transform into ASI - "artificial superintelligence" - with an initial total supply of about 2.63 billion tokens and a starting price of $2.82. Tokens from SingularityNET (AGIX) and Ocean Protocol (OCEAN) will fold into ASI, converging at rates around 0.433 to 1, aiming for a fully diluted market cap of roughly $7.5 billion.

This alliance is set on establishing an accessible decentralized AI framework, in contrast to the existing systems controlled by tech giants.

The initiative comes amid a booming interest in AI technologies, like ChatGPT, and growing concerns over the potential for a few large corporations, including Microsoft (NASDAQ: MSFT ), Alphabet (NASDAQ: GOOGL ), Amazon (NASDAQ: AMZN ), Apple (NASDAQ: AAPL ), and Meta (NASDAQ: META ), to monopolize the industry.

Those worries have prompted blockchain and Web3 companies to develop their own projects and attempt to introduce an alternative vision for AI, focusing more on transparency and communal data sharing.

[Ambar Warrick contributed to this article]

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