Coinbase premium hits one-month low as bitcoin retreats

Bitcoin’s Coinbase COIN$171.93·Market Closed premium has fallen to its lowest level in four weeks, suggesting weakening U.S. demand as investors confront a setback for crypto legislation and the prospect of tighter monetary policy.

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The premium measures the difference between bitcoin’s dollar price on Coinbase and its USDT price on Binance. CryptoQuant’s Coinbase Premium Index tracks that gap as a percentage of price. Tuesday’s reading of around -0.07% works out to roughly $50 on a $75,900 bitcoin – a thin margin but one that points to relatively weak buying demand on the U.S. exchange.

The discount has deepened to around -0.07% on Tuesday from roughly -0.02% a day earlier, as the Clarity Act failed to pass on Tuesday. That marks a reversal from late August and early September, when the premium turned positive for the first time in months, as bitcoin climbed towards $80,000. Bitcoin has since retreated to around $75,000.

Monetary policy presents another headwind. The Federal Reserve announces its decision later Wednesday, with markets widely expecting a 25-basis-point increase that would lift the federal funds target range to 3.75% to 4%.