Bitcoin (BTCUSD) kicked off the first U.S. trading day of the week on a positive note, but its gains took a hit as the U.S. 10-year yield surged to its highest level in over 16 years. Over the past 24 hours, the world’s largest digital asset slipped into the red, experiencing a 1.57% decline. Meanwhile, the much-anticipated ether futures exchange-traded funds (ETFs) failed to generate significant interest among investors, reporting low trading volumes on their debut.
As the U.S. trading day concludes, Bitcoin is poised to finish just below the $28,000 mark, reflecting a roughly 3% increase according to CoinDesk Indices data. In contrast, ether is trading at approximately $1670, showing a slight decline for the session. The CoinDesk Market Index (CMI) has seen a 1.6% rise in the past 24 hours.
In the equity markets, Monday’s performance was mixed following the weekend’s efforts by U.S. lawmakers to avert a government shutdown with a stop-gap bill. Interest rates continued their upward trajectory, with the U.S. 10-year Treasury yield surging by another 11 basis points to reach 4.69%. This increase came after unexpectedly robust manufacturing data underscored the resilience of the U.S. economy. The ISM figures came in at 49, surpassing the forecasted 47.7, hinting at the possibility of more interest rate hikes.
Within the crypto sphere, all of this unfolds as October begins, a historically strong month for the industry.
The crypto market, particularly Bitcoin, has recently witnessed a substantial rally, driven by factors such as the SEC’s approval of ether futures ETFs and various government decisions. QCP Capital, in a recent note, highlighted that Bitcoin has surged by 15% in the past two weeks. Nevertheless, QCP has reservations about the sustainability of this rally, citing shifts in demand and historical data that suggest potential market downturns.
“We would even go further to say a futures-only ETF is arguably detrimental to the spot price – as it potentially directs demand away from the spot market into a synthetic market,” they noted. QCP is preparing for the possibility that resistance might hold in the range of $29,000-$30,000 during this rally.
Regarding the newly launched ether futures ETFs, trading volumes remained subdued throughout the day.
“Even if these ETFs don’t lead to significant price fluctuations, that’s acceptable. That’s the role of assets. They shouldn’t be wildly volatile,” remarked Michael Safai, Managing Partner at Dexterity Capital, during a recent appearance on CoinDesk TV.
“ETF issuers don’t possess the market insights that traders do,” he continued. “Their optimism may be somewhat misplaced; those interested in bitcoin or ether likely already hold positions.”