The launch of the spot Bitcoin ETF in Hong Kong on April 30 did not meet market expectations and did not become a catalyst for growth in the price of the largest cryptocurrency by capitalization. On the contrary, the price of Bitcoin (BTC) lost more than 5% and fell below $60,000.
At the beginning of the Asian session on Tuesday, the price of BTC exceeded $64,500, but during the trading day, it collapsed to the neighborhood of $59,300, contrary to the expected growth.
Today, Bitcoin is trading at $60,272, showing a decline of 4.98% over the past 24 hours.
Prior to the launch of spot Bitcoin ETF trading in Hong Kong, many market participants predicted a surge in demand for the asset, speculating that it would surpass the launch of the US Bitcoin ETF by $125 million. However, the data showed that the total trading volume was just under $12.5 million.
This data caused disappointment and led to a pullback in the price of Bitcoin, reports Cryptonews. It is worth noting that the launch of crypto ETF trading in Hong Kong took place at a time when inflows into spot Bitcoin ETFs in the US were slowing, which also negatively affected their demand.
Another factor working against Bitcoin is the likelihood of no interest rate cuts by the Federal Reserve this year, which has increased to 25% from 1% last month.
The latest data from the US Department of Labor showed that labor cost growth rose 1.2% in the first quarter from 0.9% in the previous quarter amid rising wages and benefits. That points to a pickup in inflation at the start of the year, which analysts say will delay the long-awaited interest rate cut in 2024.
Michael Pugliese, a Chief Economist at Wells Fargo, emphasized that the data is not the end of the world for the Fed but suggests that the slowdown in inflation that began this time last year has stopped in the first quarter of 2024.
At the same time, a strengthening dollar and rising Treasury yields following the labor cost news put further pressure on Bitcoin.
However, not everything is so pessimistic. Analysts believe that the current dynamics of the BTC price completely copy the historical data during the 2016 and 2020 halvings. And this means that Bitcoin may start a bullish rally before the end of this year.
A cryptocurrency trader and technical analyst who goes by the nickname Rekt Capital notified his followers on his X page about further bullish growth of BTC.
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"Don't let this pullback distract you from where we are in the Bitcoin cycle," he wrote.
Nevertheless, the availability of spot Bitcoin ETFs in Hong Kong and the upcoming launch in Australia are important steps in the cryptocurrency's development. In addition, BTC's appeal as a safe-haven asset is growing amid potential geopolitical escalation in the Middle East and Eastern Europe, as well as financial instability.
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