Bitcoin, Ethereum Fall Again. This Can Reignite the Crypto Rally. — Barrons.com

By Adam Clark

Bitcoin and other cryptocurrencies were mixed on Tuesday as the sector focuses on the chances for interest-rate cuts from the Federal Reserve.

The price of the world's largest crypto was down 0.2% over the past 24 hours early on Tuesday, at around $115,064. It hit a record high of more than $124,000 last week amid optimism over interest-rate cuts.

Lower rates make risky assets such as stocks and digital assets more attractive relative to interest-generating investments such as bonds. Reduced rates also tend to weaken the dollar, which boosts crypto valuations.

Cryptos have subsequently fallen from their recent highs after wholesale price data damped optimism for lower rates and Treasury Secretary Scott Bessent said the U.S. doesn't plan to acquire more crypto assets for its Bitcoin reserve.

"Fed reserve timelines and geopolitical developments are shaping flows across equities, FX, and crypto," said Joel Kruger, market strategist at LMAX Group. "Looking ahead, the sector is navigating a delicate juncture — spurred by regulatory signals and institutional adoption, yet vulnerable to rate-decision outcomes and policy shifts."

Several large altcoins were falling. Ether fell 0.4%, and Solana was down 0.8%. However, XRP was up 1.5%. Dogecoin, which is a memecoin, was losing 2.2%.

The downturn in token prices isn't halting the rush of crypto companies aiming for an initial public offering. The latest is Gemini Space Station, founded by Bitcoin billionaire twins Cameron and Tyler Winklevoss, which filed for an IPO on Friday at an undisclosed pricing range.

Write to Adam Clark at adam.clark@barrons.com

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