Crypto Markets Drop as Powell Holds Firm on Interest Rates

Crypto markets traded lower on Monday after Federal Reserve Chair Jerome Powell said that the U.S. central bank was not ready to cut interest rates yet.

Bitcoin fell 2% to $61,850, while Ethereum slipped by 1.5%. Meanwhile, Solana and Polkadot are trading flat on the day.

“Bitcoin’s dominance has dropped more than 5% in the past few days, from 52.8% on June 25 to around 50% today. This drop typically encourages market diversification, driving investors to explore other digital assets,” said Tristan Frizza, founder of Zeta Markets.

Among the top 100 digital assets by market capitalization, Solana memecoin BONK (BONK) and gaming blockchain Beam (BEAM) were the top gainers in the past 24 hours, rallying by 7% and 6%, respectively.

“We’ve made quite a bit of progress in bringing inflation back down to our target,” Powell said at a central bankers’ forum in Europe. “We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy.”

On July 1, Bitcoin exchange-traded funds (ETFs) attracted inflows of $129.5 million, the highest since June 7, as per Farside data.

Leading the charge, Fidelity’s FBTC received $65.0 million in inflows. Bitwise’s BITB attracted $41.4 million, and ARK’s ARKB gained $12.7 million. In total, Bitcoin ETFs have accumulated $14.7 billion in assets since launching in January.

According to a research report released by crypto exchange Gemini on Monday, spot Ether ETFs — once approved for trading in the U.S.— could attract net inflows of up to $5 billion within the first six months.

U.S. stocks were flat. The Dow Jones Industrial Average was up 0.1%, while the S&P 500 jumped 0.2%, and the Nasdaq Composite rallied 0.5%.