Ethereum ETFs will likely be approved by "the end of the summer"

Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, continuing a pullback that began a day earlier when the Fed signaled it expected only one rate cut this year. The price of ether (ETH) led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler, in testimony at a Senate hearing, said he expected spot ether ETFs to receive full approvals from his agency by the end of the summer.

The news initially sent ether up by 1%, but it soon turned out to be a selling opportunity, with the price reversing more than 3% just an hour later. At press time, ether was trading at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was also lower by 4.9% over the same period.

Bitcoin (BTC) was similarly affected, with its price dropping nearly 5% to trade near a one-week low of $66,300.

Markets began trending downward on Wednesday afternoon after the Federal Reserve's hawkish policy meeting results. The U.S. central bank kept its benchmark fed funds rate range steady at 5.25%-5.50% but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets had been pricing in two to three 25 basis point cuts this year.

The macroeconomic mood in crypto was not improved by U.S. economic data released Thursday morning, which suggested a continued softening in both inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI increased by 2.2% versus forecasts for 2.5%. Initial jobless claims also rose to nearly a one-year high of 242,000 versus expectations of 225,000.

"$66K seems like equilibrium," said well-followed analyst Skew in an X post, who, along with others, is trying to decode a market that won't go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) reaching new all-time highs.