Market Wrap: Cryptoassets Dip Slightly, Equities Rise After Fed Minutes

Major equities and cryptoassets stayed mostly flat Wednesday — despite the Federal Reserve indicating additional rate rises are likely on the horizon.

Bitcoin traded in a relatively narrow ban, capitulating from $19,000 to $20,000 overnight — to a high of $20,2000 — and finished down a marginal 1.44% at the close of stock trading. Ether dipped .7% to $1,150 over the same period. 

The day started with cryptocurrency company Voyager filing for bankruptcy. An estimated $1 billion to $10 billion worth of cryptocurrencies is now stuck in limbo. The move came just a few days after the crypto lender suspended trading and withdrawals. Digital assets-focused hedge fund firm Three Arrows Capital (3AC) — which owes Voyager $650 million — previously filed for Chapter 15. 

Traders have been closely watching for today’s minutes from the Fed’s June 14-15 meeting. As futures markets have largely priced in, policymakers agreed that rates may need to increase by either 50 or 75 basis points this month. 

“Many participants judged that a significant risk now facing the committee was that elevated inflation could become entrenched if the public began to question the resolve of the committee to adjust the stance of policy as warranted,” the minutes said. 

Betting markets have priced about a 93% chance of a 75 basis point hike and an about 7% chance of a 50 basis point hike this month, according to CME Group data. 

Major US stock markets were unmoved: The Dow Jones rose 0.23% by close, while the S&P 500 was up 0.36% and the Nasdaq increased 0.35%. 

Tuesday marked the long-awaited drop in the cost of crude oil. The ICE Brent Crude futures contract for September delivery fell 2.31% to $100.40. Jeffrey Halley, senior market analyst at OANDA, wrote in a note Wednesday the price action overnight “hints more at panic and forced liquidation, than a structural change in the tight supply/demand situation globally.”

It’s worth noting some of the decentralized finance (DeFi) platforms that provide crypto lending and borrowing services have weathered the turbulence well. Aave was up 2.93%, while Maker has seen a 4.52% increase in the past 24 hours.

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