According to CoinDesk, cryptocurrency markets experienced a downturn during U.S. trading hours on Thursday. This decline continued from the previous day when the Federal Reserve indicated it only planned to cut rates once this year. Ether, in particular, led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler stated in a Senate hearing that he anticipated spot ether ETFs to have full approvals from his agency by the end of the summer. This announcement led to a 1% increase in ether's price, but it soon became a selling opportunity as the price dropped more than 3% an hour later. At the time of reporting, ether was trading at $3,440, a 5% decrease over the past 24 hours. The broader CoinDesk 20 Index also fell by 4.9% during the same period.
Bitcoin's price also fell nearly 5%, trading near a one-week low of $66,300. The market downturn began on Wednesday afternoon following the Federal Reserve's hawkish policy meeting results. The U.S. central bank maintained its benchmark fed funds rate range at 5.25%-5.50%, but surprised many with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets had been pricing in two to three 25 basis point moves this year.
The macro mood in the crypto market did not improve with the release of U.S. economic data on Thursday morning, which suggested a continued softening in both inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. Initial jobless claims also rose to nearly a one-year high of 242,000 versus expectations of 225,000. Despite recent bullish news such as improving inflation data, a Bitcoin-friendly presidential frontrunner, spot ETH ETF approvals, and other risk asset markets reaching new all-time highs, the market has struggled to sustainably increase.