Bitcoin Crosses $61K as Traders Remain Cautious Ahead of U.S. CPI, Further Unwinding of Yen Carry Trade

BTC surpassed $61K on the Asian trading day, outperforming CD20.

Investors remain bullish on TON due to its integration with Telegram and the growing GameFi ecosystem.

Bitcoin {{BTC}} led gains among major tokens by rallying above $61,000 during Asian trading hours on Wednesday, reversing losses stemming from a steep price crash earlier this month.

Bitcoin gained over 3%, with majors ether {{ETH}}, Solana’s SOL, Cardano’s ADA, xrp {{XRP}} and BNB Chain’s BNB all up 2.8%, data from CoinGecko shows. Major memecoins dogecoin {{DOGE}} and shiba inu (SHIB) were up just 1%, suggesting that sentiment is not in favor of riskier bets.

Bitcoin’s gains outpaced a 2.45% rise in the CoinDesk 20 (CD20), a liquid index that tracks the largest tokens by market capitalization and excludes stablecoins.

Despite the modest gains, some hedge funds remain cautious amid a busy data week, warning of possible near-term jitters that could hinder any continued rally.

“Investors remain cautious ahead of the US CPI this week,” crypto trading firm QCP Capital said in a Telegram post. “They will be watching inflation numbers closely for guidance on whether the Fed will cut interest rates by 50 or 25 basis points in September. The odds are now evenly split.”

Wednesday’s rebound helped provide gains for traders who have been paring losses since the 20% market plunge in early August when the popular yen carry trade was ended. And some strategists are warning of more losses from carry trades, warning that the impact is not completely over.

Richard Kelly, global strategy chief at TD Securities, told CNBC earlier this week that he was “very hesitant” to declare the end of carry trading.

“I would dispute a lot of these narratives. You don’t have any real data to price your carries, as far as we know,” Kelly said in a CNBC interview. “I think there’s a lot that can be figured out, especially when you look at how undervalued the yen is.”

“This will change valuations for the next one to two years. This will have spillover effects,” he added.

The Bank of Japan (BoJ) recently raised interest rates for the first time in more than a decade, destabilizing global markets and risk assets, including bitcoin. When interest rates are low, traders borrow yen cheaply to invest in another asset with a higher rate of return, creating the carry trade.

The rise in interest rates has created a ripple effect that has affected almost all markets, affecting the profitability of trading strategies. BTC fell by 15% in a 24-hour period, one of the biggest declines in recent years, while major tokens fell by 22%.

The story continues

The Bank of Japan’s deputy governor said in early August that the central bank would refrain from raising interest rates due to unstable markets, which would affect yen carry trades and risk assets.

The central bank will delay further interest rate hikes until next year, a former BOJ official said, indicating a preference for market stability in the near term.

Alongside Bitcoin, investors also remain optimistic about TON.

Toncoin’s TON rose 7% in the Wednesday Asian trading session, according to CoinDesk Index data. Stakeholders in the Toncoin ecosystem cite the growth of GameFi on the platform and its close integration with Telegram as reasons for the token’s continued growth.

“The player count of TON games has broken the glass ceiling of previous blockchain games with viral social growth on Telegram. And some TON games have already confirmed that they are generating significant revenue not from token sales but from the gameplay itself,” John Cheang, Asia-Pacific lead of the TON Foundation, said in an email interview, also noting that TON’s record-high blockchain transactions per second are one reason it is scalable.

Ben El-Baz, Managing Director of HashKey Global, which invests in TON ecosystem projects like Catizen, said in an email comment that taking advantage of Telegram would “attract more developers” and that this was a significant opportunity for TON.