YEREVAN (CoinChapter.com) — The Bank of England recently cut interest rates by 0.25% to 5%, the first rate cut in four years, surprising many, with economists divided on the expected outcome.
Bitcoin falls 5.20% as trading volume surges amid market volatility
Historically, loosening monetary policy can boost riskier assets like Bitcoin and gold. Despite the Bank of England’s decision, the Bitcoin price is down, down 5.20% over the last 24 hours to $62,947.23, according to CoinMarketCap. The market cap has also fallen by 5.19% to around $1.24 trillion.
On the other hand, the volume surged by 34.14% to $36.33 billion, indicating increased market activity despite the price drop. The circulating supply remained at 19,734,243 BTC, approaching the maximum supply of 21,000,000 BTC. This decline coincided with the increase in volume, suggesting increased market volatility and investor activity during this period.
Bitcoin Price Holds Below $65,000 as Fed Rate Decision Keeps Hopes Up for September Rate Cut
Bitcoin’s price is also being influenced by the recent decision by the U.S. Federal Reserve to maintain its key lending rate. On August 1, the cryptocurrency was hovering below $65,000. The market is expecting further action from the Federal Reserve, which could potentially impact liquidity and asset prices. Bitfinex analysts noted:
“A rate cut in September could create a bullish mood and increase overall market liquidity, which would be positive for Bitcoin and other cryptocurrencies.”
Bitcoin ETFs See Massive Fund Outflows Amid Market Volatility
The slowdown in investment flows into US-based Bitcoin exchange-traded funds (ETFs) has impacted Bitcoin’s market performance. According to Farside Investors, US ETFs saw a modest inflow of $300,000 on July 31, but a net outflow of $18.3 million the day before. ETF inflows have previously played a significant role in Bitcoin’s price movements, especially when it broke $50,000.
As these factors evolve, the Bank of England’s rate cuts, U.S. monetary policy, and ETF investment trends continue to impact the Bitcoin market environment.