Bitcoin (BTC) has seen growth to over $67,000 after the Federal Reserve released its Beige Book document on Wednesday, which showed concern over the growth of the US economy. This report indicates that the costs could be lower in the months that are ahead.
Nine out of the 12 regional banks noted that the economic activity has hardly changed or has worsened since the beginning of September. Many regions experienced a contraction in manufacturing, and consumer spending appeared to be on a downward trend.
There was also a reduction in inflation with a rise in the prices in most regions being minimal. Although there was some growth in employment, much of the recruitment was to fill existing positions rather than growth. There was also a deceleration in wage growth in many regions.
How Federal Reserve’s Beige Book Comments Changed the Market
However, the general picture even with strong numbers in the September job market remains poor, which could lead to further cuts in rates from the Fed Beige Book. Bitcoin recovered from overnight lows below $53,500 and is currently rated 1% up at $67,300. The dollar index (DXY) is retreating, reaching 104.30 in a pullback from an overnight peak of 104.57 and, data from TradingView shows.
Several Fed officials, including Chairman Jerome Powell, pointed to the gloomy Beige Book outlook as a key reason for lowering the benchmark borrowing rate by 50 basis points to 4.75%-5% in September. Markets swiftly anticipated another 75 basis points cut by year’s end. But those expectations were dampened by strong September job numbers and a higher-than-expected inflation report for the month.
Number of Bitcoin Whales Gets to Highest Since 2021
Data from Glassnode and André Dragosch, head of research for Europe at Bitwise, reveals that the number of “whales” — entities holding at least 1,000 BTC — rose to 1,678 earlier this week. This is the highest level since January 2021. The increase in large holders, along with strong demand for alternative investments like U.S.-listed spot ETFs, points to growing confidence in bitcoin’s future price.
Whales are defined as clusters of crypto wallet addresses controlled by a single participant, each holding 1,000 BTC or more. Their activity is closely followed due to their ability to impact market liquidity and prices.
BREAKING: Total number of #Bitcoin whales just reached the highest level since Jan 2021! 🐳
Latest data by @glassnode show that there are 1,678 entities that are considered to be whales.
Whales are defined as network entities that control at least 1k BTC.
New ATHs incoming? pic.twitter.com/q49AeUDWj2
— André Dragosch, PhD | Bitcoin & Macro ⚡ (@Andre_Dragosch) October 23, 2024
Retail Investor Accumulation Slows Down As BTC Nears $70,000
Retail investors have been slowing their Bitcoin accumulation as the price nears $70,000, according to data from CryptoQuant.
“Retail holdings have risen by just 1K Bitcoin in the last thirty days, a historically slow pace, since the start of 2024, the holdings of other larger investors (those holding between 1 and 10K Bitcoin) have grown faster than the holdings of retail investors on a yearly basis,” they added.
At the time of writing, Bitcoin was trading just above $67,000, about 10% away from its all-time high of $73,800. Prices briefly hit $69,000 on Monday before pulling back, likely due to the rising dollar index and Treasury yields.
Some analysts believe the impact of rising yields on risk assets like Bitcoin won’t last long, with many expecting a move higher. Options trading on Deribit suggests that $80,000 and $100,000 are key levels to watch for the remainder of the year.
The recent surge of Bitcoin beyond $67,000 can be attributed to an increasing number of investors who are confident in the crypto and its uses, irrespective of the wide position of the US economy. As per the Federal Reserve’s Beige Book economic report, the current state of the economy was described as seeing continuing activity but with a possible slowdown in the future, which might invite additional cuts on rates. However, the number of Bitcoin whales also hit the highest since January 2021, which makes the situation interesting as it means there is increased demand for alternative assets.
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