Investing.com– Bitcoin fell on Friday, extending steep declines seen through this week as risk appetite was soured by increasing doubts over U.S. interest rate cuts before a widely anticipated address from Federal Reserve Chair Jerome Powell.
The world’s biggest cryptocurrency was nursing a nearly 4% slide this week, as it was battered by a wave of profit-taking after reaching record highs earlier in August. Broader crypto prices also retreated on Friday, and were headed for weekly declines.
Crypto markets took little support from a report that China was considering developing state-back, yuan-based stablecoins to boost trading in the yuan. The country effectively banned all crypto trade in 2021.
Bitcoin fell 0.9% to $112,943.4 by 01:29 ET (05:29 GMT).
Bitcoin declines amid waning rate cut bets; Powell awaited
Bitcoin’s recent losses came amid a broader deterioration in risk appetite, as markets steadily priced down expectations that the Fed will cut interest rates in September.
Fed Fund futures pricing showed markets pricing in a 73.1% chance the Fed will cut rates by 25 basis points in September, down sharply from an over 90% chance seen last week, CME Fedwatch showed.
The minutes of the Fed’s late-July meeting, released earlier this week, showed a bulk of central bank members supported keeping rates steady in the near-term.
Powell, who will speak at the Jackson Hole Symposium later on Friday, has remained largely non-commital towards any future rate cuts, citing uncertainty over the inflationary impact of President Donald Trump’s trade tariffs.
Some signs of resilience in the U.S. economy, as seen with stronger-than-expected purchasing managers index data for August, also weighed on expectations for rate cuts.
High for longer interest rates bode poorly for speculative assets such as crypto, given that they in part limit liquidity and also discourage speculative investment. Bitcoin had clocked deep losses as the Fed raised interest rates through 2022 and 2023, and rallied sharply as the Fed began easing in 2024.
Crypto price today: altcoins fall, head for weekly losses amid rate angst
Broader crypto prices all fell in tandem with Bitcoin, and were also headed for weekly losses amid extended profit-taking from August peaks.
World no.2 crypto Ether fell 0.9% to $4,277.18, and was trading down 3.2% this week.
XRP fell 2.2%, and was set to lose 7.6% this week.
Cardano and Solana shed 2.5% apiece, and were trading down more than 7% each this week.
Among meme coins, Dogecoin fell 2.8%, while $TRUMP shed 4.6%.
