Cryptocurrency markets ended the Aug 31-Sept 4 period modestly higher after a volatile week dominated by shifting US interest-rate expectations, Middle East tensions and institutional fund flows.
Based on Investing.com’s daily reference prices, Bitcoin rose about 2.7% from US$78,570 on Aug 31 to around US$80,713 on Sept 4, while Ethereum gained roughly 2.3% from US$2,468 to US$2,524 over the same period.
The week started on firmer footing as institutional demand provided support. US spot Bitcoin exchange-traded funds (ETFs) also attracted about US$217 million of inflows at the start of the week, while Ether ETFs recorded an 11th consecutive session of net buying, helping underpin sentiment.
Momentum reversed on Sept 1 and Sept 2 as renewed US-Iran tensions sent oil prices and global bond yields sharply higher. Rising energy costs fuelled inflation concerns and pushed expectations for a September Federal Reserve (Fed) rate hike towards 70%, prompting investors to trim exposure to risk assets. Bitcoin fell towards US$77,000, while Ethereum also came under pressure.
The strongest rebound came on Sept 3 after Fed Governor Christopher Waller signalled that he could support keeping rates unchanged if inflation continued to moderate, and this resulted to Bitcoin surging more than 5% to briefly top US$82,000, while Ethereum jumped nearly 5%, with short-covering adding momentum to the rally.
Gains were, however, pared on Sept 4 after the US economy added a stronger-than-expected 162,000 jobs in August, reviving bets that the Fed could raise rates this month. As such, Bitcoin slipped back below US$80,000 during the session as rate-hike expectations climbed to around 60%.
Overall, the week highlighted crypto’s continued sensitivity to Fed policy expectations, Treasury yields and geopolitical-driven oil prices, with institutional ETF demand providing a counterweight to macroeconomic uncertainty.
