Bitcoin slipped below $62,000 Tuesday, relaxing after the rally caused by last week’s affirmation by Federal Reserve Chairman Jerome Powell that a shift to rate cuts was imminent. Meanwhile, the crypto market — AI crypto issues in particular — braced for impact from Nvidia’s earnings on Wednesday.
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Nvidia Earnings Are A Key Test For The Stock Market Rally. Here’s What To Expect.
Bitcoin spiked as high as $64,879 on Friday, after Fed Chair Powell during his annual Jackson Hole, Wyo., speech said that “the time has come for our policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance sheet risks.”
Bitcoin had traded around $61,000 prior to the announcement. Ethereum peaked at $2,815 on Saturday after the speech, but has retreated back around its $2,590 level prior to Powell’s address.
“A lower interest rate environment would be supportive of crypto assets as it both invites healthy investor risk appetite and a softer U.S. dollar,” Joel Kruger, market strategist at LMAX Group wrote to IBD.
Crypto exchange Bybit and 10x Research in a Tuesday report wrote that Powell’s speech set expectations for increased market liquidity, which could potentially benefit risk assets like bitcoin. Bybit and 10x believe bitcoin’s upward trend could persist from consistent, modest inflows into spot bitcoin ETFs.
Spot bitcoin ETFs on Friday recorded $252 million in inflows, led by BlackRock’s iShares Bitcoin Trust (IBIT). Inflows declined Monday, but were still strong at $202.6 million, according to data from Farside Investors.
Crypto Sensitive To Nvidia Earnings
Meanwhile, Wedbush Securities analyst Dan Ives believes Nvidia earnings will boost tech stocks more broadly, according to a note first reported by Fortune. “The stage is set for tech stocks to move higher,” Ives wrote, and he predicts “another masterpiece quarter” from Nvidia.
The price of bitcoin and cryptocurrencies could follow Nvidia higher if the company beats forecasts, or tumble if it disappoints, according to the report.
“The market has been making big bets on Nvidia because it believes the company is at the forefront of the future of technology. With that said, and especially in an otherwise data-light calendar day, the earnings results could very well have an impact on the direction of stocks,” Kruger said. “Correlations between stocks and crypto have been running lower of late, though we believe crypto assets would be inclined to show some sensitivity to earnings should they deviate on either side of expectations.”
Nvidia Earnings On Deck: Spotlight On AI Giant’s Competitive Moat
AI-related crypto tokens have surged in the last week leading up to the report. AI tokens are cryptocurrencies developed to fuel AI-based projects, applications and services.
Crypto-AI-Robo.com’s token CAIR vaulted nearly 1,288% over the last seven days, according to data from CryptoSlate. VIDT DAO’s token VIDT rallied about 159% during that time. PALM, the token for PaLM AI spiked more than 81% over the last week. Arcona and Edge Matrix Computing saw their tokens jump about 55%.
Ives added in his note that Nvidia’s earnings should reassure investors that the AI-led boom this year isn’t overdone. He said the current market resembles 1995-1996, the start of the internet movement, rather than a 1999 tech bubble. Nvidia’s chips are the “new oil and gold” and hotly in demand for the world’s biggest tech companies to train their generative AI models.
Bitcoin Price
Bitcoin traded around $61,930 Tuesday afternoon, down about 2.6% over the last 24 hours. BTC has held above $60,000 since Aug. 20. But the world’s top crypto hasn’t been able to retake its record high of $73,798 from March 14. Still, bitcoin rallied more than 47% so far this year.
Spot bitcoin ETFs, including IBIT and the ARK 21Shares Bitcoin ETF (ARKB), slid more than 2% Tuesday, adding to their slight decline Monday. The group collectively leapt about 5.5% Friday.
Bitcoin miners Core Scientific (CORZ), Marathon Digital (MARA), Iren (IREN) and Hut 8 (HUT) weakened between 3.5% and 8% Tuesday.
Coinbase (COIN) stock slid 3% Tuesday.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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