Bitcoin traded virtually flat on Wednesday,
stabilizing after losses in recent sessions, as lingering concerns about high U.S. interest rates and waning investor interest kept cryptocurrency markets generally down.
The world's largest cryptocurrency rose 0.5% to $62,673.2 by 12:49 PM.
A plunge in tech and chip stocks this week has kept investors wary of riskier assets, leaving little room for cryptocurrency, despite investors shifting away from high-growth tech stocks.
Markets remained tense over the prospect of higher U.S. interest rates for a longer period following hawkish signals from last week's Federal Reserve meeting. PCE price index data due this week is expected to provide further guidance.
Bitcoin Treads Water; ETF outflows continue
Bitcoin traded in a narrow range last week, holding just above yearly lows amid a lack of positive signals for crypto markets.
Cryptocurrency prices were also pressured by continued capital outflows from spot exchange-traded funds, which are now heading into their seventh consecutive week of outflows.
While the pace of outflows has slowed in recent weeks, they have shown little sign of reversing to inflows.
AI-related assets, particularly stocks, have seen increased investor interest in recent weeks, attracting capital from cryptocurrencies to sectors with clearer fundamentals.
CLARITY Act a Key Catalyst for Coinbase, According to BofA
Bank of America reiterated its "Buy" rating on Coinbase Global Inc (NASDAQ:COIN), stating that upcoming US cryptocurrency legislation could be a key catalyst for the exchange operator.
The brokerage stated that the proposed CLARITY Act could strengthen Coinbase's position as a leading partner in the US for traditional financial institutions seeking to participate in blockchain.
BofA also pointed to the recent approval for Coinbase (in conjunction with Kalshi) to launch perpetual futures products in the US as a growth driver, noting that the global perpetual futures market is three to four times larger than the cryptocurrency spot market.
The brokerage stated that passage of the CLARITY Act could provide a short-term boost to trading volumes and revenue, while the favorable regulatory environment under the Trump administration continues to support the broader crypto industry.
However, efforts to pass the CLARITY Act through Congress have largely stalled in recent weeks amid ongoing disputes between crypto and banking lobbyists over stablecoins and interest payments.