Hovers Around $60K Ahead of Rate Cut Announcement

Bitcoin’s price increased on Wednesday as investors anticipated a potential interest rate cut by the Federal Reserve. Additionally, recent data indicating an improvement in capital flows into spot exchange-traded funds (ETFs) contributed to positive sentiment in the market.

The price of Bitcoin rose by 0.6% to reach $59,964.0 by 09:13 ET, following several weeks of trading within the range of $50,000 to $60,000 throughout September. Other cryptocurrencies experienced similar gains as the markets prepared for lower U.S. interest rates, which are thought to favor risk-driven and speculative assets.

### Bitcoin ETFs Experience Inflows After Previous Outflows

This week’s data showed that BlackRock’s iShares Bitcoin Trust recorded its first day of inflows in two weeks on Monday, breaking a streak of outflows that started in mid-August. This shift is seen as a positive turn in sentiment after concerns over the upcoming U.S. presidential election, interest rates, and the risk of a recession had pressured crypto prices overall.

However, trading volumes in U.S. Bitcoin ETFs remain significantly lower than the peaks observed earlier this year, as interest in these ETFs has waned, particularly among retail investors.

### MicroStrategy Expands Bitcoin Holdings and Plans Debt Issuance

MicroStrategy Incorporated has made headlines again by purchasing approximately $1.1 billion worth of Bitcoin between August 6 and September 12, further solidifying its position as the largest corporate holder of the cryptocurrency. The company now possesses about $9.5 billion in Bitcoin.

In an announcement this week, MicroStrategy revealed plans to raise around $700 million through a private issuance of convertible bonds due in 2028, intending to use the funds to pay off earlier debts and acquire more Bitcoin.

### Altcoin Movement and Anticipated Fed Rate Cut

The overall cryptocurrency market saw upward movement due to expectations of a widely anticipated interest rate cut by the Federal Reserve later on Wednesday. Ether, the second-largest cryptocurrency, dipped by 0.4% to $2,319.94, while various altcoins moved within a stable range.

Among meme tokens, one notable increase was observed, with a rise of 0.25%. The Fed’s decision on interest rates is highly awaited, with initial speculations varying between a 25 or 50 basis point reduction. Recent trends within trading circles suggest a growing preference for a larger cut.

Lower interest rates generally enhance liquidity in the market, allowing more capital to flow into riskier and speculative assets such as cryptocurrencies.

### Shift in Australia’s Central Bank’s CBDC Development Focus

In another notable development, Australia’s central bank announced a shift in its focus from developing a consumer-oriented retail Central Bank Digital Currency (CBDC) to a wholesale CBDC. Financial System Assistant Governor Brad Jones disclosed this change during a fintech conference in Melbourne.

Unlike a retail CBDC meant for everyday transactions by consumers, a wholesale CBDC would facilitate transactions between banks and financial entities, including cross-border payments. Jones noted that the bank perceives greater economic benefits and fewer challenges with a wholesale CBDC compared to a retail version.

Furthermore, the Reserve Bank of Australia has committed to a three-year research initiative called Project Acacia. This initiative will explore the future of digital money in Australia, particularly focusing on wholesale central bank digital assets and tokenized commercial bank deposits, while examining how concepts like programmability and atomic settlement could enhance the Australian economy.