Bitcoin (BTC) is edging higher, as the shock from the U.S. Federal Reserve's rate increase eased within a day and falling oil prices and U.S. Treasury yields restored some appetite for risk assets.
Bitcoin traded at $76,420.99 as of 8:08 a.m. on the 18th, up 0.97% from 24 hours earlier, according to CoinMarketCap, a global cryptocurrency data site. At the same time, ether (ETH) rose 2.24% to $2,446.80, BNB gained 2.32% to $735.57 and XRP added 0.62% to $1.29.
The domestic market was mixed. On Bithumb at the same time, bitcoin traded at 105.5 million won, up 0.05% from the previous day. Ether fell 0.44% to 3.378 million won and XRP slipped 0.33% to 1,787 won.
Cryptocurrencies benefited overnight as risk appetite recovered. Financial markets took an initial hit after the Fed raised its benchmark rate by 0.25 percentage point on the 16th and signaled the possibility of further tightening, but sentiment steadied somewhat as oil prices and Treasury yields subsequently declined.
All three major New York stock indexes rebounded. On the 17th, the Standard & Poor's 500 rose 1.14%, the Nasdaq gained 1.69% and the Dow Jones Industrial Average added 0.61%. The Nasdaq's advance stood out as buying flowed into technology shares.
Lower oil prices and Treasury yields also supported sentiment. On the 17th, November Brent crude settled at $104.82 a barrel, down 0.95%, while West Texas Intermediate fell 0.50% to $101.91. Concerns about supply disruptions from the Middle East eased in part after reports that Saudi Arabia was moving to supply more crude. The yield on the 10-year U.S. Treasury note, which had topped 5% the previous day, retreated to the 4.9% range.
Regulation also gave the market a lift. The U.S. Securities and Exchange Commission on the 17th granted temporary, conditional exemptions for the market in "tokenized stocks," or U.S.-listed shares traded on blockchains. Trading platforms that meet certain requirements will be exempt from the obligation to register as an exchange under securities law, and some liquidity providers will be exempt from dealer registration. The measure applies for five years.
The SEC's move came shortly after the U.S. Senate failed to advance a procedural vote on the CLARITY Act, a bill that would set the market structure for cryptocurrencies. Comprehensive crypto legislation in Congress has been delayed, but expectations in the industry grew as the SEC used its authority under existing law to experiment with rules for the tokenization market.
Still, the prospect of further Fed rate increases remains a drag on bitcoin. At this meeting the Fed raised rates for the first time since July 2023 and left the door open to additional tightening. Sixteen of the 18 Fed officials projected at least one more increase this year. The labor market also remains solid, with U.S. initial jobless claims at 196,000 last week, below market expectations, leaving investors wary of further tightening.
Outflows from spot bitcoin exchange-traded funds are another burden. U.S. spot bitcoin ETFs saw net outflows of $450.4 million on the 15th, the largest single-day net outflow since June 24. Karen Manna, a fixed-income strategist at Federated Hermes, told Reuters that much of the tightening risk has already been priced into the market, but that the more important question is whether the Fed sees this increase as sufficient or as the start of further tightening.
