Crypto market update: US inflation brings investors back

By Raffaele Redi

Leading cryptocurrency prices were recovering by midday

Bitcoin, ripple and other cryptocurrencies on a trading screen                                 
A new rally on bitcoin was driven by US inflation, but the Fed could stop the crypto momentum – Photo: Shutterstock
                                

A record US inflation rate, the highest in the last 40 years, alongside USD depreciating in value against both EUR and GBP, brought investors back to the crypto market, with leading cryptos starting to climb again after the sell-off witnessed in the first few days of 2022.

However, any intervention on interest rates by the Federal Reserve to prevent inflation rises could potentially halt crypto’s momentum on the market once again.

“We will use our tools to support the economy and a strong labour market, and to prevent higher inflation from becoming entrenched,” Fed chairman Jerome Powell said recently.

Record inflation

Driven by skyrocketing energy prices, the annual inflation rate in the US accelerated to 7% in the last month of 2021, reaching the highest level since June 1982, in line with market expectations and compared to 6.8% in the previous month.

Meanwhile, traditional stock markets were mixed on Thursday early trading, with commodities trading higher in the last 24 hours.

As demand outstrips supply, the price of Brent was 0.2% higher at $84.80 per barrel, with US WTI flat at $82.66. Gold was $1,823.57 per ounce, around 0.1% lower in the last 24 hours.

Meanwhile, the major cryptocurrencies were all trading higher at midday, with crypto mining in Kazakhstan apparently ready to recover following the recent unrest.

High volumes for bitcoin

According to Currency.com, BTC, the largest cryptocurrency by market capitalisation, is trading 1.8% higher over the past 24 hours at $43,716.79 – and 2% higher over the past seven days.

The market cap of BTC was around $828.2bn, representing around 40% of the crypto market capitalisation, while the leading crypto’s trading volume was around 183% higher at $75.2bn in the past 24 hours.

The total crypto market capitalisation increased by $37bn, from $2.039trn to $2.076trn, in the past 24 hours.

Ethereum and cardano reversal

Despite delays on the Ethereum 2.0 launch, with the blockchain switching from a proof-of-work protocol to proof-of-stake, investors have already deposited over ETH9m from ether addresses intending to stake Ethereum, according to data analytic platform Nansen.

Digital silver, ether (ETH) was trading 1.6% higher at $3.357.79, with a market capitalisation of $398.3bn. The cryptocurrency’s trading volume was around 10.4% lower at $15.2bn in the past 24 hours.

Meanwhile, in line with major stablecoins, binance coin (BNB), the third-largest cryptocurrency by market cap, was trading 2.1% higher at $422.81, with a market cap of $80.4bn and a trading volume of $4bn – almost 6.8% lower in the past 24 hours.

Solana, on the other hand, which recently started powering NFTs and the metaverse, was trading 7.1% lower at $153.69, with a market cap of $47.4bn and a trading volume of $2.1bn.

Interestingly, Cardano (ADA) was trading 2.9% higher at $1.29 after an initial rally in early trade, as Coinbase fixed a withdrawal bug on Wednesday.

Top gainers and losers

Elsewhere, the likes of Baby White Hamster (BWH) and several other minor cryptos witnessed an increase of more than 1,000% in the past 24 hours.

On the flip side of the coin, PumpETH (PETH) was trading down by over 100%.

All prices are correct as of 13:15 UTC.

Further reading

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