Bitcoin Volume Hits Historic Lows as Fed Rate Hike Looms

Bitcoin's spot trading volume is plummeting to 2023 lows as markets await the Federal Reserve's interest rate decision on Wednesday. According to K33 Head of Research Vetle Lunde, average daily spot volume across tracked exchanges has reached just $2.2 billion in July, down 4% from the prior week.

This decline is also reflected in derivatives markets, where CME bitcoin open interest remains near 2023 lows and funding rates have stayed between 5% and 7%. Macro analyst Alex Krüger warns that a rate hike would 'have serious legs' and should be priced into assets like gold and silver.

The Federal Reserve's decision is seen as uncertain, with markets pricing roughly a one-in-three chance of a quarter-point hike. Fed Chair Kevin Warsh has adopted a no-guidance approach, leaving markets to speculate rather than front-run his thinking.