Bitcoin retreated last week following a more hawkish-than-expected outlook from the US Federal Reserve, while Franklin Templeton unveiled plans for two exchange-traded funds (ETFs) that would automatically reinvest stock dividends into bitcoin exposure.
According to Simon Peters, Crypto Analyst at eToro, bitcoin fell to $62,180 after last Wednesday’s Federal Open Market Committee (FOMC) meeting and the first press conference by new Federal Reserve Chair Kevin Warsh.
Major cryptocurrencies also moved lower over the week, with ether, solana and XRP recording declines of between 5% and 10%.
Although the Federal Reserve kept interest rates unchanged, the updated dot-plot projections signalled a more hawkish stance than markets had anticipated. Nine policymakers projected at least one rate increase this year, while six indicated that multiple hikes remain possible, prompting investors to reassess risk assets, including cryptocurrencies.
Commenting on the market reaction, Simon Peters, Crypto Analyst at eToro, said: “Although the Fed left interest rates unchanged, the updated dot-plot projections were more hawkish than traders and investors had expected. Markets reacted by repricing risk assets, which contributed to bitcoin and broader crypto market weakness following the meeting.”
Looking ahead, markets are focused on US Personal Consumption Expenditures (PCE) inflation data due later this week. “If inflation remains above target or accelerates further, markets may take the Fed’s projections more seriously,” Peters added. “However, if inflation continues to cool, investors may view the dot-plot as overly pessimistic and revert to pricing in no rate hikes this year, particularly given the recent decline in oil prices and easing geopolitical tensions in the Middle East.”
Meanwhile, Franklin Templeton has filed with the US Securities and Exchange Commission (SEC) to launch two ‘Bitcoin DRIP’ ETFs, which would automatically reinvest dividends from US equities into bitcoin-linked investments.
The proposed Franklin US Equity Bitcoin DRIP Index ETF would track the 500 largest US-listed companies by market capitalisation, while the Franklin US Innovation Bitcoin DRIP Index ETF would focus on 100 major non-financial companies listed on the Nasdaq.
Both funds are expected to launch with approximately 95% allocated to equities and 5% allocated to bitcoin-linked investments, including spot bitcoin ETFs. Bitcoin exposure would increase gradually through the automatic reinvestment of dividends.
Peters commented: “Franklin Templeton’s proposed Bitcoin DRIP ETFs create a new bridge between traditional equity investing and systematic bitcoin accumulation. Investors would gain diversified exposure to US equities while gradually building bitcoin exposure through an automated, rules-based investment process.”
BIGGEST MOVERS
Aerodrome Finance’s native token, AERO, was among the strongest-performing cryptoassets last week, rising 35% and returning to levels last seen in mid-May.
The rally followed the announcement of a major protocol upgrade that replaces the platform’s weekly gauge-voting mechanism with real-time liquidity incentive allocation. Additional support came from continued token buybacks by the Aerodrome Foundation and increased accumulation by large holders.
Discover more here: https://www.etoro.com/discover/markets/cryptocurrencies/market-movers
