Confidence in Fed’s contribution to crypto thaw

Several recent indicators show a possible thaw in last year’s crypto winter as the Fed lowers inflation.

The first sign is an increase in the price of bitcoin, which is the overall bellwether of the cryptocurrency markets. During January, the native cryptocurrency gained 30% in value against the US Dollar. It moved from $17,000 to around $21,000, where it has been stable since the fall of FTX in November.

crypto market and nft

In line with bitcoin, the cryptocurrency markets have also shown signs of revival recently. The second largest crypto Ethereum has also gained about 31% since the beginning of the month. From similarly stable, around $1,200, Ethereum is now up to around $1,600.

Although still below its peak of $3.2 trillion in November 2021, the total crypto market capitalization has also recovered. From around $830 billion at the end of last year, the total crypto market cap is back above $1 trillion.

Although similarly below its peak, non-fungible token sales have also seen a Rebound in recent weeks. After a trend of more than a month of declining NFT sales, volumes actually increased on a monthly basis in December.

The divergence can be attributed to the launch of NFT marketplace Blur. In December, the “NFT Marketplace for Pro Traders” saw trading volume of $484 million. This was almost double the volume of the general market leader OpenSea during the same period.

confidence in the feds

Similar to traditional financial markets, cryptocurrencies have started to rally due to investor confidence in the policies of the Federal Reserve. Over the past year, it has consistently raised interest rates at an aggressive pace to address rising inflation.

Although the Fed scaled down the amount of rate hikes during its last meeting, among reasonable indicators its policies are working. His forecast proved correct, as the Consumer Price Index actually fell 0.1% in December according to the latest data. Although year-on-year inflation remained at 6.5%, it still represented the sixth consecutive month of decline.

Markets have thus become hopeful of a “soft landing” for a possible recession that an aggressive Fed could trigger. One expert pointed out that the overall market rally was once again involved in riskier assets like cryptocurrencies.


BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.

Source link

Leave a Comment