Bitcoin (BTC) Gain Checked by Hints of Further BOJ Rate Rises

The latest price moves in crypto markets in context for Sept. 3, 2024.

Bitcoin rose above $59,000 on Tuesday, but the rally was largely erased by suggestions of further interest-rate increases in Japan, while a slew of U.S. economic data is set to hit the markets later this week.

Latest price movements in crypto markets:

CoinDesk 20 Index: 1,857.87 +0.73%

Bitcoin (BTC): $59.022 +0.84%

Ether (ETH): $2,506 −0.53%

S&P 500: 5,648.40 +1%

Gold: $2495.38 −0.07%

Nikkei 225: 38,686.31 −0.04%

Bitcoin above $59K, more U.S. data this week: First Mover Americas Bitcoin rose above $59,000 on Tuesday, though the rally was pared by suggestions of further interest-rate increases in Japan. Still, BTC remains 1% higher in the last 24 hours while the broader crypto market has risen around 0.9%, according to the CoinDesk20 Index. A slew of U.S. economic data is due this week, kicking off with the Institute of Supply Management's manufacturing purchasing managers' index for August later on Tuesday. A weak reading will strengthen the case for the Fed to cut interest rates, which would be expected to boost riskier assets like crypto.

Bank of Japan Governor Kazuo Ueda reiterated that the central bank will raise interest rates further if the economy and inflation develop as expected. Ueda said the economic environment remains accommodative, with inflation-adjusted interest rates negative even after a late July increase in the benchmark borrowing cost. That was the first in decades and triggered an unwinding of yen carry trades, destabilizing risk assets. Ueda's comments drew bids for the yen, pushing the USD/JPY pair to 145.85 from 147. Futures tied to the S&P 500 slipped by 0.5% and bitcoin by 0.4% to $58,920, according to CoinDesk data. The BOJ's plan to tighten monetary policy poses a challenge for risk assets because the U.S. Federal Reserve is likely to start cutting rates in September.

Japanese investment adviser Metaplanet, which adopted bitcoin as a reserve asset earlier this year, has tapped SBI VC Trade to provide custody services, the crypto exchange said on Monday. The partnership will allow Metaplanet to use bitcoin as collateral for financing, the adviser said in a statement. In May, Metaplanet said it was adopting bitcoin as a reserve asset to hedge against the volatility of the yen. As of Aug. 20, it held 360.4 BTC ($21 million). The reserve-asset strategy mimics software developer MicroStrategy, which has been buying bitcoin since 2020 and now holds over 226,000 BTC, more than 1% of all the bitcoin that will ever exist.

Chart of the Day: Bitcoin Price Movements in 2023 vs. 2024

Bitcoin began 2023 trading around $47,000 before rallying to highs above $73,000 in March, a 54% gain in the first quarter. The second quarter saw a downturn with bitcoin falling to lows around $53,000 by mid-June, a 28% decline from the Q1 highs but still up 13% year-to-date. In the second half of 2023, bitcoin rallied again, hitting highs above $83,000 in November, a 57% gain in the third quarter and a 78% gain year-to-date. The year ended with bitcoin trading around $77,000, a 65% gain for 2023.

In 2024, bitcoin began trading around $55,000 before rallying to highs above $73,000 in March, a 35% gain in the first quarter. The second quarter saw a downturn with bitcoin falling to lows around $58,000 by mid-June, a 21% decline from the Q1 highs but still up 6% year-to-date. A weak reading on the Institute of Supply Management's manufacturing purchasing managers' index for May led to a rally in riskier assets, including bitcoin, which rose to highs above $63,000 by the end of June. After beginning the year at $55,224, bitcoin ended June at $63,230, a 15% gain