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Bitcoin experienced a modest rise on Monday, gaining 1.3% over the past 24 hours to reach $68,709.5 by 01:39 ET (05:39 GMT). Despite this uptick, the premier cryptocurrency has remained confined within a $60,000 to $70,000 trading range since mid-March. Market sentiment is cautiously optimistic about potential interest rate cuts from major central banks this week, coupled with a weaker dollar.
Bukele's Re-election Yields Minimal Impact on Bitcoin Price
The re-election of El Salvador’s President Nayib Bukele, who made history by adopting Bitcoin as legal tender in 2021, had little effect on the cryptocurrency's price. Although Bukele is a prominent figure in the crypto world due to his aggressive Bitcoin purchases and legalization efforts, his recent swearing-in ceremony featured scant references to Bitcoin. Notably, Bukele has also removed all mentions of Bitcoin and cryptocurrencies from his social media profiles on X (formerly Twitter).
Bukele's second-term promises focused on addressing the struggling El Salvadorian economy, which has been burdened by soaring government debt. The adoption of Bitcoin has had limited success in stimulating economic growth. Additionally, Bukele's ambitious “Bitcoin City” project has failed to attract significant private investment, leading the country to revert to traditional financial markets with a $1 billion bond issuance earlier this year.
Despite these challenges, El Salvador’s Bitcoin holdings have substantially appreciated, thanks to a robust rally in the cryptocurrency market throughout 2023 and into early 2024.
Crypto Market Stays Tepid Despite Rate Cut Hopes
The broader cryptocurrency market showed limited movement on Monday, despite a rally in risk-driven assets fueled by expectations of interest rate cuts. Ether, the second-largest cryptocurrency, edged up 0.3% to $3,817.63. In contrast, SOL and XRP saw marginal declines of 0.8% and 0.1%, respectively.
Among the meme coins, SHIB dropped 1.6%, while DOGE managed a 0.5% gain.
Stock markets also surged on Monday, buoyed by anticipation of rate cuts from the European Central Bank and the Bank of Canada later this week. Meanwhile, expectations for a rate cut by the Federal Reserve in September have increased, following data released on Friday indicating a slight cooling in inflation. However, the central bank is widely expected to maintain current rates at its meeting next week.
In summary, while Bitcoin saw a slight increase, it remains rangebound, reflecting a cautious market outlook amid economic uncertainty and central bank policy speculation.