Bitcoin’s price has dipped below $100,000 amid trader caution before the Federal Reserve’s interest rate decision. The anticipated rate cut has strengthened the dollar, impacting risk assets including cryptocurrencies. Despite these challenges, Bitcoin and Ether ETFs are seeing sustained inflows, indicating growing institutional interest in the market.

Bitcoin’s price experienced a slight decline on Friday, retreating from recent highs as traders exhibited a cautionary stance ahead of an impending Federal Reserve interest rate decision. After a notable rally on Thursday prompted by optimistic comments from President-elect Donald Trump regarding the U.S. commitment to becoming a leader in the cryptocurrency sector, Bitcoin dipped 0.7% to $99,961.4 by 00:30 ET (05:30 GMT).

Attention now turns to the Federal Reserve, which is anticipated to announce a 25 basis points interest rate cut at its upcoming meeting. However, uncertainty regarding the Fed’s long-term interest rate trajectory has emerged following surprising producer inflation data. As a result, the dollar strengthened, exerting downward pressure on riskier assets, including cryptocurrencies, particularly as the appeal of speculative assets diminishes amid high-interest rates.

In a positive development for the cryptocurrency market, recent data indicates that Bitcoin and Ether spot exchange-traded funds (ETFs) have experienced steady inflows, suggesting heightened institutional interest. Specifically, Bitcoin ETFs recorded an eleventh consecutive day of inflows as of December 12, with major contributions coming from Blackrock’s iShares Bitcoin Trust. Additionally, Ether ETFs have also shown strong inflows over the past two weeks.

As Bitcoin faced downward pressure, most significant altcoins mirrored its losses, although they had previously shown strong performance. Ether saw a slight decrease of 0.3% to $3,916.31, while XRP fell by 3.6% to $2.3458. Other cryptocurrencies, including Solana, Cardano, and Polygon, experienced declines between 2% and 7%.

The article outlines the current trends and conditions surrounding Bitcoin and the broader cryptocurrency market as traders prepare for a key decision from the Federal Reserve regarding interest rates. It emphasizes how regulatory expectations under President-elect Donald Trump have been fostering cautious optimism in the crypto sector despite recent price fluctuations. Additionally, the status of spot ETFs indicates an interesting shift towards institutional investment in cryptocurrency, reflective of the evolving regulatory landscape.

In summary, Bitcoin’s recent price decline can be attributed to heightened market caution in anticipation of the Federal Reserve’s interest rate decision. Although Bitcoin has seen dips, the positive trend in ETF inflows reflects growing institutional interest in cryptocurrencies. As the markets grapple with regulatory uncertainties and inflation readings, investors remain focused on how these factors will shape the future of cryptocurrency investment.

Original Source: ca.investing.com

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