Following the Fed’s rate cut on September 18, Bitcoin and Ethereum exhibited correlated price movements. Bitcoin initially rose to nearly $64,000 before correcting to $60,000, then stabilized around $67,000. Ethereum followed a similar pattern, peaking at $2,700 after corrections. The ratio of market capitalization between the two cryptocurrencies suggests Ethereum briefly outperformed Bitcoin, though institutional demand continues to favor Bitcoin significantly, as reflected in ETF performances.

Following the Federal Reserve’s rate cut on September 18, 2023, the price movements of Ethereum (ETH) have closely mirrored those of Bitcoin (BTC). According to market data, on September 18, BTC was valued at approximately $60,000. The Fed’s decision to reduce rates by 50 basis points spurred an increase in Bitcoin’s price, which surged to nearly $64,000 the subsequent day, a price level it had been unable to sustain since late August. By late September, Bitcoin reached a high of $66,000 before experiencing a correction that brought it back to about $60,000, effectively creating a period of lateral price movements. This period seemed to end on October 11, when Bitcoin’s price bounced back to $63,000 and continued to climb to around $67,000 within a week, stabilizing above the $66,000 mark. In a similar pattern, the price of Ethereum began at about $2,300 on September 18 and witnessed an immediate rise to $2,400 following the Fed’s announcement. Subsequently, ETH reached $2,500 and even $2,600 but then faced a correction back to $2,300 by early October. A resurgence occurred on October 11, as Ethereum’s price rose first to $2,600 and then exceeded $2,700. Analysis of the BTC/ETH ratio indicates that from September 18 to 23, Ethereum’s market capitalization outperformed that of Bitcoin, with the ratio decreasing from 4.2 to 3.9. However, following corrections in October, the ratio reverted back to 4.2 and has generally stabilized at this level, which is close to its annual highs, indicating a strong alignment of price trends between Bitcoin and Ethereum starting only in October. A report by Kaiko Research elucidates that the slower growth of Ethereum can be attributed to less institutional demand compared to that for Bitcoin. Despite the introduction of spot ETFs for Ethereum in July, which many had initially viewed with optimism, the response from the market was markedly muted. An outflow of over $460 million from Ethereum’s ETFs contrasts sharply with the successful inflows seen by Bitcoin ETFs, signaling a preference among institutional investors for Bitcoin over Ethereum. Grayscale’s ETF for Ethereum, which has faced a staggering $3 billion in outflows since its inception, exacerbates this issue. In contrast, Bitcoin ETFs have seen a recovery in outflows since February, underscoring the more favorable position traditionally occupied by Bitcoin in the American financial landscape, as evidenced by historical trading data on U.S. markets, where BTC has become more prominently favored by investors than ETH.

The Federal Reserve’s monetary policy actions, particularly decisions regarding interest rates, can profoundly influence financial markets, including cryptocurrencies like Bitcoin and Ethereum. This article examines the price trends of these two cryptocurrencies following the Fed’s rate cut and analyzes the underlying market dynamics that contribute to their behavior. By looking closely at the market capitalization ratios and price changes, one can gain insight into investor sentiment and institutional demand within the cryptocurrency space. The performance of spot ETFs for both assets also provides context for understanding the current trends.

In summation, the immediate aftermath of the Federal Reserve’s rate cut on September 18 resulted in visible price movements for both Bitcoin and Ethereum, demonstrating a tendency for Ethereum to follow Bitcoin’s trajectory. While both assets experienced initial gains, subsequent corrections brought them back to previous price levels. The analysis highlights the stark differences in institutional interest, with Bitcoin maintaining a more robust appeal compared to Ethereum. Factors such as ETF performance and market dynamics contribute to Ethereum’s slower growth, indicating ongoing challenges for its price recovery relative to Bitcoin.

Original Source: en.cryptonomist.ch

Related posts:

Emerging Cryptocurrencies Projected to Surge in 2024 Amidst Bitcoin’s Climb to $100k Market Analysis: Bitcoin’s Struggles and Promising Altcoins Amid Anticipated Fed Rate Cut Over-The-Counter Trades: Unveiling the Hidden Influences on Bitcoin Pricing CoinDesk 20 Performance Update: AVAX and LTC Show Gains as Index Rallies