Key Takeaways
- Solana, Dogecoin, and Cardano witnessed stronger performance compared to the overall cryptocurrency market on Wednesday.
- The cryptocurrency market seemed unconcerned by Congress’s inability to approve a temporary funding bill, averting a potential government shutdown.
- Bitcoin’s price climbed above $117,000 for the first time in approximately two weeks, fueled by expectations of a likely 0.25% interest rate decrease by the Federal Reserve at the upcoming October FOMC meeting.
Solana, Dogecoin, and Cardano
demonstrated substantial gains relative to the general recovery observed across the crypto market Wednesday morning.
According to CoinGecko, a price aggregation service, the total value of the cryptocurrency market has risen by 3.3%
since Tuesday. In contrast, SOL experienced a 6.3% surge to reach $220, DOGE increased by 7.7% reaching $0.245, and ADA
rose by 6.6% to $0.84 at the time of this report.
Late Tuesday, the U.S. Congress was unable to garner the required support for the passage of a continuing resolution,
legislation intended to prevent a government shutdown.
Analysts previously shared with Decrypt that the potential economic report delays that might come with a shutdown could
cause increased volatility in cryptocurrency markets.
However, others believed a dip would be brief and viewed as an opportunity to buy.
According to Bitunix analysts, a prolonged shutdown could cause delays in data releases, suppress spending and
investments, raise concerns about slower economic growth, and increase expectations for a more relaxed policy, a note shared with Decrypt stated.
Short-term support for the dollar and Treasuries comes from demand for safe havens, although the final outcome will still
rely on subsequent Fed actions.
The Federal Open Markets Committee (FOMC) is scheduled to convene at the close of October, and it
will examine the possibility of either raising or lowering the federal interest rates—and by what amount. Lowered
interest rates generally boost risk-on assets like crypto and stocks.
On Myriad, a prediction market operated by DASTAN, Decrypt’s parent company, a large majority of users, 74%,
now confidently expect that the FOMC will vote in favor of a 25-basis point
reduction when it meets next.
Meanwhile, Bitcoin’s value has exceeded $117,000, marking its highest point
in nearly two weeks, representing nearly a 4% increase since yesterday. Ethereum has also experienced growth,
increasing by 5% within the past 24 hours, and exceeding the $4,300 threshold.
The crypto market isn’t the only one ignoring the shutdown fears. The S&P 500 closed near its highest point for the month on
Tuesday, even though the CBOE Volatility Index has slightly risen by 3% over the past day.
Analysts at QCP Capital, a Singapore-based firm, noted in a trading update that a U.S. government shutdown should not impact the market apart from the headline noise and potential data delays. Essential services continue and past shutdowns did not stop risk assets.
The altcoins that outperform the rest of the market could be due to analysts’ belief that ETF approvals related to assets like SOL are certain.
This has been positive for Solana exchange-traded products that are already available for trading. CoinShares, a digital
asset manager, reported that they attracted $291 million last week.
One of the newly listed funds, the Rex-Osprey SOL + Staking ETF, has already pulled in $21.5 million in inflows
this week. The fund launched in July and currently holds $349 million in managed
assets.
Daily Debrief
Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.