Factors Limiting Bitcoin's Rise at $80,000

Bitcoin's ability to maintain a sustained rise above $80,000 is dependent on the U.S. Federal Reserve's (Fed) interest rate policy and liquidity conditions. According to CoinShares' analysis, while demand for cryptocurrencies continues, investors are adjusting their positions based on interest rate expectations. Increased buying in the spot market supports this situation. CoinShares Research Director James Butterfill noted that Bitcoin has exhibited pricing similar to gold, but the Fed's interest rate policy is capping the rise at the $80,000 level. Changes in interest rate expectations have also reflected in digital asset investment products. Fed Chairman Kevin Warsh's remarks at Jackson Hole, indicating that progress on inflation has been limited, increased the likelihood of a rate hike in September, leading to an outflow of approximately $100 million from digital assets. With Fed Board Member Christopher Waller highlighting signs of a slowdown in inflation, inflows recorded until September 4 reached $1 billion. Markets are pricing in the probability of a rate hike at around 60% for the next Federal Open Market Committee meeting. From August 31 to September 4, net inflows into spot Bitcoin ETFs in the U.S. amounted to $968.9 million, while spot Ethereum ETFs saw net inflows of $130.3 million. Although total inflows reached approximately $1.1 billion, this represents a 32.8% decrease compared to the previous week. The open position size in the Bitcoin derivatives market decreased by 0.6% to $53.15 billion. The increase in the U.S. Treasury's bond buybacks caused Bitcoin to rise from $60,000 to $80,000. Recent fund flows indicate that demand for cryptocurrencies has not weakened, but Bitcoin's gains above $80,000 will depend on U.S. inflation data and the Fed's interest rate decision.

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