YEREVAN (CoinChapter.com) — The Bank of England recently cut its interest rate by 0.25%, bringing it down to 5%. This is the first rate cut in over four years, surprising many as economists were divided on the expected outcome.
Bitcoin Drops 5.20% as Trading Volume Surges Amid Market Volatility
Historically, easing monetary policies can boost risk-on assets like Bitcoin and gold. Despite the Bank of England’s decision, Bitcoin’s price saw a decline, dropping 5.20% to $62,947.23 within the past 24 hours, according to CoinMarketCap. The market cap also decreased by 5.19%, falling to approximately $1.24 trillion.
In contrast, trading volume surged by 34.14%, reaching $36.33 billion, indicating increased market activity despite the price drop. The circulating supply remains at 19,734,243 BTC, nearing the maximum supply of 21,000,000 BTC. This decline coincides with heightened trading volumes, suggesting increased market volatility and investor activity during this period.
Fed’s Rate Decision Keeps Bitcoin Price Under $65K; Possible September Cut Sparks Hope
Bitcoin’s price also feels the effects of the United States Federal Reserve’s recent decision to maintain its key lending rates. On August 1, the cryptocurrency stayed below $65,000. The market anticipates further developments from the Federal Reserve, with potential impacts on liquidity and asset prices. Bitfinex analysts noted,
“A rate cut in September would provide a sense of bullishness and could generally increase liquidity in the market, which will be positive for Bitcoin and other cryptocurrencies.”
Bitcoin ETFs See Major Outflows Amid Market Volatility
Investment flows into US-based Bitcoin exchange-traded funds (ETFs) have slowed, influencing Bitcoin’s market performance. On July 31, US ETFs saw a modest $300,000 inflow, while the previous day recorded $18.3 million in net outflows, according to Farside Investors. ETF inflows have previously played a significant role in Bitcoin’s price movements, especially when it surpassed the $50,000 mark.
As these factors develop, the Bank of England’s rate cut, US monetary policies, and ETF investment trends continue to shape Bitcoin’s market environment.
The post Bitcoin Price Faces Key Moment After Bank of England Cuts Interest Rates appeared first on CoinChapter.
