Crypto Markets Rally After U.S. Retail Sales Beat Expectations

Cryptocurrency markets traded higher on Tuesday as investors digested retail sales data ahead of the Federal Reserve's September policy meeting.

Bitcoin (BTC) gained 5% while Ethereum (ETH) is up 3%, with BTC trading at $61,000 and ETH at $2,370. Polkadot (DOT) was down 1%, while Solana (SOL) gained 2%.

Retail sales measure the total revenue of goods sold by retailers, reflecting consumer spending and economic health. This data gives insights into consumer behavior, indicating trends in the economy, such as whether people are spending more or cutting back.

August retail sales data offered a final snapshot of U.S. consumer health before the Fed's interest rate decision tomorrow, showing a 0.1% increase — beating the expected 0.2% decline.

Wall Street anticipates a rate cut from the Federal Reserve, which has been aggressively hiking rates since March 2022 to combat inflation. However, market participants remain divided over the magnitude of the cut.

Current data from the CME Group’s FedWatch tool indicates a 67% chance of a 50 basis points cut, up from the 47% last Friday.

Polymarket traders put the odds at 53% for a cut of 50+ basis points and 47% for 25 basis points.

Meanwhile, the number of Bitcoin addresses depositing BTC on exchanges has plummeted to 132,100, its lowest since 2016.

“A low value suggests a decrease in the number of investors selling coins on spot exchanges, potentially indicating a reduction in selling pressure,” on-chain analytics firm CryptoQuant tweeted.

DBS Bank Launches Crypto Options Trading

Singapore's DBS Bank is set to offer over-the-counter (OTC) crypto options trading and structured notes to institutional clients and accredited wealth clients.

On Sept. 17, DBS announced plans to offer financial products linked to Bitcoin and Ethereum starting in the fourth quarter of 2024. This move allows clients to hedge against crypto market volatility using options trading and structured notes.

“Professional investors are increasingly allocating to digital assets in their portfolios,” said Jacky Tai, group head of trading and structuring, global financial markets, DBS. “Now, our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.”

Bitcoin ETFs Record Minor Inflows

BlackRock's Bitcoin Exchange-Traded Fund (IBIT) recorded its first inflows in three weeks on Monday, attracting $15.8 million, according to data from Farside Investors.

U.S.-listed spot Bitcoin ETFs as a whole recorded a net inflow of $12.8 million. While most funds experienced modest gains, Grayscale Bitcoin Trust (GBTC) faced a net outflow of $20.8 million. For Ethereum, total outflows reached $9 million, with BlackRock’s Ethereum ETF (ETHA) pulling in $4.2 million, while the Grayscale Ethereum Trust (ETHE) lost $13.8 million, and Bitwise Ethereum ETF (ETHW) faced outflows of $21 million.

Meanwhile, stock markets also turned positive. The S&P 500 rose by 0.4%, the Nasdaq Composite climbed 0.5%, and the Dow Jones Industrial Average advanced by 0.2%.