Bitcoin, Ethereum, XRP Fall Ahead of Fed Minutes. Why Rate Cuts Matter for Crypto. — Barrons.com

By George Glover

Bitcoin and other cryptocurrencies were falling again Wednesday as investors awaited minutes from the Federal Reserve for any clues on interest rates.

The world's largest digital token by total market capitalization was down 1.1% to $113,825 over the past 24 hours, according to data from CoinDesk. It's now trading 9% off the record high it hit last week.

Other cryptos were also in the red. Ethereum was down 0.8% and XRP tumbled 4%. Solana bucked the trend with a 1% gain.

It isn't a surprise that the tokens were sliding after the tech-heavy Nasdaq Composite index dropped 1.5% on Tuesday as Wall Street opted to dump some of its favorite stocks of the year. Cryptos and tech stocks tend to move in tandem as they're risk-on assets.

The main factor dragging on digital assets this week has been investor uncertainty about what the Fed will do next, after wholesale inflation data came in a little hotter than expected.

The central bank releases minutes from its last monetary policy meeting at 1 p.m. today which could give clues about its next move on interest rates. Traders now think there's an 85% chance it will cut rates in September, down from 94% a week ago, according to the CME FedWatch tool. When borrowing costs fall, cryptos tend to get a boost because they are more appealing compared with lower-yielding assets such bonds or cash.

Write to George Glover at george.glover@dowjones.com

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