Market Update: U.S. Stocks Drift Lower Ahead of Fed; Bakkt Offers Up Physical Bitcoin Futures
U.S. stocks drifted mostly lower on Tuesday, as traders reduced their exposure to riskier assets ahead of the Federal Reserve’s upcoming policy decision on Wednesday. Crypto markets were down across the board despite getting some positive news from a keenly awaited blockchain startup.
Stocks Mostly Lower
The S&P 500 Index declined 0.1% at 2,915.57, with seven of 11 primary sectors finishing lower. Losses were largely concentrated in utilities and consumer staples. After a strong open, Dow industrials reversed course to finish down 69.71 points, or 0.3%, at 26,492.34.
The technology-heavy Nasdaq Composite Index bucked the downtrend, climbing 0.2% to 8,007.47.
Monetary policy is back in focus on Wednesday as the Federal Reserve concludes its two-day meeting in Washington. Fed officials widely expected to raise interest rates for the third time this year. The policy statement, which will be released at 2:00 p.m. ET, will be accompanied by a quarterly summary of economic projections covering GDP, unemployment and inflation.
Altcoins, Tokens Plunge
The cryptocurrency market lost more than $10 billion in combined value on Tuesday, though losses were largely concentrated in altcoins and tokens. Ethereum, XRP, EOS and XLM – ranked nos. 2, 3, 5 and 6 by market cap, respectively – each fell by at least 10%.
Capital outflows from bitcoin left the digital currency with a loss of 3.9%. BTC was last valued at $6,381 on total trade volumes of $4.5 billion.
After a promising week, cryptocurrencies entered a brief period of consolidation before resuming their slide on Monday. Combined market values are down $24 billion from Friday’s high. While the pullback wasn’t unexpected, given XRP’s massive rally last week, the extent of the selloff offers further evidence of a prolonged bear market that is disproportionately impacting altcoins and tokens.
ICE’s Bakkt Announces Physical Bitcoin Futures
Although bearish forces still control crypto prices, market fundamentals continue to paint a brighter future for digital assets. Case in point: Bakkt, the new cryptocurrency startup created by Intercontinental Exchange (ICE), is set to unveil the first physically delivered bitcoin futures contracts. The announcement, which was confirmed on Tuesday by ICE, will offer new pathways for institutional investors and retail traders to access cryptocurrency.
“Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR,” Bakkt tweeted on Tuesday. “For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.”
ICE’s new crypto platform is set to launch in November. In addition to securitizing crypto assets, Bakkt has partnered with some of America’s biggest companies to bring bitcoin payments to consumers.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.