By Priya Menon
Bitcoin edged up on Wednesday, trading close to the $64,000 mark as market participants largely refrained from taking large directional bets ahead of the U.S. Federal Reserve's policy announcement later in the day. The world's largest cryptocurrency was last seen about 1% higher at $64,075.5 by 01:56 ET (05:56 GMT).
Volatility in risk assets has increased this week, driven in part by profit-taking in artificial intelligence-linked technology stocks. Bitcoin had fallen below $63,000 in the prior session as AI-led global equity weakness pressured broader markets, but its decline has been more contained relative to sharp moves in semiconductor and AI-related names.
Investors were centering attention on the Fed decision, with uncertainty over the outcome keeping trading subdued. CME FedWatch data showed that markets were pricing roughly a 68% probability that the central bank would hold rates steady, while assigning about a 32% chance of a 25-basis-point increase. A hawkish surprise from the Fed could weigh on cryptocurrencies and other risk-sensitive assets, while a dovish tilt could support demand for digital assets.
Equity markets in Asia felt the strain from renewed selling in chipmakers tied to AI demand, pressuring regional indexes. South Korea's KOSPI slid more than 12% as the selloff intensified among AI-linked chip suppliers. Within that cohort, SK Hynix shares tumbled as much as 20% after the memory-chip maker reported record quarterly earnings that nonetheless fell short of investors' elevated expectations.
Institutional flows into crypto have shown mixed signals. U.S. spot Bitcoin exchange-traded funds logged modest net inflows overall in July despite several sessions of outflows in recent days, suggesting uneven institutional appetite amid the week’s market swings.
Beyond the Fed’s policy decision, investors were also watching earnings from major U.S. technology companies including Microsoft and Meta Platforms for additional clues on artificial intelligence spending trends and broader sentiment across tech-related sectors.
Crypto price snapshot
- Bitcoin: up about 1% at $64,075.5 by 01:56 ET (05:56 GMT)
- Ethereum: rose 1.5% to $1,912.92
- XRP: climbed 2.6% to $1.0858
- Solana: edged 0.6% higher
- Cardano: jumped 4.5%
- Dogecoin: ticked up 0.3%
Most altcoins traded higher in range-bound activity on Wednesday, mirroring Bitcoin’s relatively steady performance while investors awaited clearer direction from the Fed and quarterly results from major technology firms.
Key considerations going forward
- How the Fed frames the outlook for interest rates will likely influence demand for risk assets, including cryptocurrencies.
- Earnings reports from major technology firms could shift sentiment in AI-linked stocks and spill over into broader risk markets.
- Institutional flows into spot Bitcoin ETFs have been mixed, with modest net inflows in July but intermittent outflows in recent sessions.