Bitcoin ETFs are experiencing a noteworthy upswing in premarket trading, despite Jerome Powell’s declaration that the Federal Reserve will not be acquiring Bitcoin (BTC/USD). So, what’s fueling this apparent contradiction?
On Thursday, data from Benzinga Pro revealed that several Bitcoin ETFs enjoyed favorable movements. The Bitwise Bitcoin ETF (BITB) saw a surge of 1.08%, the ARK 21Shares Bitcoin ETF (ARKB) rose by 1.41%, the Grayscale Bitcoin Trust (BTC) (GBTC) climbed 1.32%, the Fidelity Wise Origin Bitcoin Fund (FBTC) advanced by 1.04%, and the iShares Bitcoin Trust ETF (IBIT) increased by 1.26%.
Powell’s statements came right after the Federal Open Market Committee’s latest meeting, where he underscored that the Fed lacks the legal authority to own Bitcoin. He affirmed that any deliberations regarding Bitcoin accumulation would rest firmly with Congress. This discussion coincides with proposals for a U.S. Strategic Bitcoin Reserve, brought forth by Donald Trump.
Interestingly, even in light of Powell’s remarks, Bitcoin has maintained its upward momentum, largely due to rising expectations surrounding Trump’s pro-crypto policies. That said, his words took a toll on Bitcoin’s rally, which had been riding high on prospects of a friendlier regulatory environment. As of now, Bitcoin was trading at approximately $102,085 after dipping below the $100,000 threshold earlier in the week.
On a related note, Senator Cynthia Lummis (R-Wyo.) has put forth legislation advocating for a Bitcoin reserve; yet, implementing such a plan would require congressional backing and could encounter resistance from the Federal Reserve, as per analysts at Barclays.
Understanding this situation is crucial, especially after Powell’s comments caused ripples in the financial markets. His hawkish stance on interest rates led to significant turmoil, prompting Jim Cramer of CNBC to highlight the “incredible panic” that ensued.
This market apprehension stemmed from Powell revealing a 25-basis-point rate cut to 4.25%-4.5%, emphasizing just two potential rate cuts in 2025, which is fewer than the four that were hinted at in September.
What does all this mean for Bitcoin and its reign in the market? Among the factors contributing to its resilience are the growing interest in Bitcoin ETFs and the unfolding political landscape that may sway regulatory attitudes. As investors remain optimistic, the Bitcoin narrative continues to evolve, promising exciting twists ahead.
