BTC Crosses 30K For the First Time in 10 Months as Fed Prepares Latest Inflation Data
In the early hours of Monday, Bitcoin rallied to $30,000, its highest level in 10 months as investors are awaiting the latest inflation data from the Federal Reserve that could steer the crypto market while other industry proponents are touting the digital asset as a hedge against inflation, like gold.
Bitcoin Crosses $30,000 and Ether Closes on $2,000 Ahead of Key Inflation Data
According to Dow Jones Market Data, the world’s largest cryptocurrency by market capitalization rose 7% to trade at a peak of $30,321 before dropping to its current valuation of $30,076. However, Bitcoin (BTC) is still down over 57% from the all-time high of $69,000 it reached in November 2021.
Ether (ETH), the second-largest cryptocurrency by market cap, rose over 3% to $1,925, closing on the $2,000 mark for the first time since August 2022.
The rally can also be attributed to the highly anticipated “Shapella” hard fork that is scheduled to go live on the Ethereum blockchain on April 12. ETH is still down over 60% from its all-time high of $4,878 which it attained 17 months ago.
James Lavish, managing partner of the Bitcoin Opportunity Fund – a value investment fund that helps high-net-worth individuals get exposure to the original cryptocurrency – said that since Bitcoin touched the $30,000 mark, it is likely that the asset will move into the “mid-to-high” 30s if it pushes through conviction and would force short sellers to cover their positions and buy instead. He claims that some investors are trying to get positioned before Bitcoin reaches the predicted level.
Lavish also noted that traders will be speculating that Wednesday’s consumer price index numbers from the Fed would come in at a level that would convince the central bank to pause raising interest rates on the dollar in its next meeting. He said such an event would give assets like Bitcoin a much-needed boost.
Speaking to Market Watch, David Tawil, president and co-founder of crypto-asset fund ProChain Capital said the ongoing banking crisis in the United States and Europe has helped change Bitcoin’s reputation among investors, going from a speculative asset to a haven against a possible recession.
Stefan Rust, the founder of inflation calculator Trueflation, believes that there will be an influx of liquidity into Bitcoin from Asia, especially after many tech companies from the region that held accounts with the failed Silicon Valley Bank will be “looking for new places to put their money.”
Banking Failures Have Helped Prop Up the Importance of Crypto Assets
Following a turbulent 2022, cryptocurrencies have been rallying this year. Monday’s action brings Bitcoin’s year-on-year gains to more than 80%, meanwhile, Ether has gained 60% in the same period.
Historically, the price of cryptocurrencies has tracked the percentage level of the dollar, but both BTC and ETH “decoupled” in March which was driven by the failures of several high-profile banks in the U.S. that helped prop up the importance of decentralized assets.
According to Rachel Lin, co-founder, and chief executive of Ethereum-based derivatives market SynFutures, yesterday’s rally may have been partially driven by the growing influence of the crypto market in other parts of the world.
While regulators in the United States are increasing their oversight of the industry, many industry players are being forced to leave for jurisdictions with crypto-friendly regulations, like Hong Kong and Dubai.
Hong Kong Finacial Secretary Paul Chan said in a statement on Sunday that while the crypto market has historically been highly volatile, it was the right time to promote the adoption of the third generation of the internet all over the world.