What Happened Ahead of the Possible 50 Basis Point Interest Rate Cut?

CoinDesk 20 Index: 1,838.51 +0.82%Bitcoin (BTC): $59,071.10 +0.46%Ether (ETH): $2,310.05 +0.23%S&P 500: 5,633.09 +0.13%Gold: $2,575.42 -0.32%Nikkei 225: 36,203.22 -1.03%

Bitcoin has returned to the $59,000 level in European morning hours, posting a gain of around 0.7% in the past 24 hours.

The CoinDesk 20 Index rose slightly below 0.65% as investors focused on tomorrow’s Federal Open Market Committee (FOMC) meeting, where officials are expected to announce their first rate cut in four years.

The 30-Day Fed Funds futures price suggests that investors think there is a 65% chance that interest rates will be cut by 50 basis points to a range of 4.7%-5%. Yesterday, that probability was around 50%, and a month ago, it was 25%.

BlackRock’s bitcoin ETF (IBIT) saw its first inflow in three weeks yesterday, bringing in $15.8 million, according to SoSoValue data.

U.S.-listed spot bitcoin ETFs saw net inflows of $12.9 million, with some funds seeing smaller gains offset by $20.75 million exiting Grayscale’s GBTC. While IBIT is the largest of the 12 funds with $20.92 billion in assets, inflows have been almost zero since Aug. 26. That three-week period coincided with bitcoin’s slide from above $64,000 to below $55,000.

Although IBIT’s gains yesterday were relatively small, the industry’s largest ETF is back to positive inflows, which could be a positive sign for BTC investors.

The team behind World Liberty Financial, the crypto project promoted by former President Donald Trump and his sons, announced during an X Spaces stream that they will be developing a governance token (WLFI).

The team stated that WLFI will be non-transferable and will not provide any economic rights. The token, which will not provide any economic returns, will be targeted at buyers who want to contribute to the management. Approximately 63% of the token will be allocated for the public offering, 17% for user rewards, and 20% will be given to the team. In addition, the token will be sold only to accredited investors under a rule known as the Regulation D exemption from the Securities and Exchange Commission (SEC).

Regulation D exemptions allow companies to offer securities to accredited investors without requiring registration with the SEC or allow them to raise capital in small, private offerings.

The chart shows the decline in the ETH/BTC price ratio, and the ratio is at its lowest level since April 2021. This situation reveals that investors prefer bitcoin over ether. The high inflows recorded by BTC ETFs are striking when compared to the outflows in ETH ETFs. In short, the market prefers the stability of bitcoin to the high-yielding but riskier ether.