Key takeaways:
Robust US economic indicators and increasing gold prices divert investor attention from Bitcoin’s potential gains.
Ongoing regulatory uncertainty and ambiguous US Strategic Bitcoin Reserve plans suppress BTC prices despite positive macroeconomic factors.
Bitcoin (BTC) was unable to reclaim the $110,000 mark on Friday, even with high trader expectations following the monthly BTC options expiry. Anticipations for a post-expiry surge were thwarted by persistent bearish momentum influenced by various challenges, including macroeconomic data and a potential investigation into cryptocurrency treasury firms.
The US Commerce Department revealed on Friday that the Personal Consumption Expenditures (PCE) price index increased by 2.7% in August year-over-year, aligning with economists’ forecasts. Ongoing inflation is contributing to the US Federal Reserve’s hesitance in lowering interest rates.
Bitcoin struggles as gold approaches record highs
Traders have tempered their expectations for interest rates to drop to 3.75% or below by year-end, according to futures markets.
The CME FedWatch tool indicates a 67% implied probability of two 0.25% rate cuts by the year’s end, down from 79% a week earlier. Bitcoin traders’ frustrations were heightened as gold surged to $3,770 on Friday, just 0.5% below its all-time high, indicating a shift toward traditional safe-haven investments amid increasing uncertainty.
The S&P 500 gained ground on Friday after data demonstrated a 0.6% increase in US consumer spending for August. Economists had previously forecast a slowdown in spending toward the end of the year, citing rising prices and concerns regarding a weakening labor market, according to Yahoo Finance.
A robust US economy tends to bolster stock markets by enhancing corporate earnings and reducing perceived risks, particularly in the context of growing trade war tensions. The Trump administration recently rolled out another round of import tariffs, including a 100% duty on patented pharmaceuticals.
Regulatory pressures and policy delays frustrate Bitcoin traders
Aside from macroeconomic issues, the cryptocurrency market faces its own hurdles, further complicating Bitcoin’s price struggle.
A Wall Street Journal report on Thursday highlighted that several cryptocurrency treasury firms have been approached by US regulators. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority have reportedly expressed concerns over unusually high trading volumes prior to corporate announcements.
Regulations prohibit public companies from disclosing material, nonpublic information selectively, raising suspicions about sharp stock gains preceding related disclosures. “It’s typically the first step in an investigation. Whether it proceeds to full-length inquiry is uncertain,” remarked David Chase, a former SEC enforcement attorney, to WSJ.
Related: Crypto markets are down, but corporate proxies are faring much worse
Traders are increasingly frustrated with the lack of progress on the US strategic Bitcoin Reserve initiative. Although the Executive Order issued in March mentioned “budget-neutral” strategies for Bitcoin acquisition, no specific actions have been taken. Despite repeated assurances to audit governmental cryptocurrency holdings, no moves have materialized.
Ultimately, Bitcoin’s price is still under pressure from a supportive macroeconomic environment for the stock market and emerging uncertainties regarding a potential SEC investigation and the unclear status of US Bitcoin reserves.
This article is for informational purposes only and should not be interpreted as legal or investment advice. The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.
