Crypto

Bitcoin (BTC) surges above $22,000 ahead of inflation and Ethereum crash data – Reuters

Bitcoin surged above $22,000, continuing its week-long rally ahead of US inflation data and a highly anticipated Ethereum network upgrade.

The world’s largest cryptocurrency hit $22,341.50 as of 9:45 pm ET Sunday, according to data from CoinDesk, after which it fell slightly. Bitcoin traded at $22,203 around 4:03 am ET Monday.

After falling below $19,000 on Wednesday to its lowest level since June, bitcoin has since recovered about 17%.

It also follows last week’s profitable week for US equities. Bitcoin is closely linked to the stock markets, especially the Nasdaq, and often rises when the tech index rises.

Crypto investors are looking forward to the August CPI report, which is expected to be released on Tuesday, to see which direction inflation is heading, which could provide some guidance on future US Federal Reserve policy action.

Cryptocurrency is facing an unusual double whammy this week: US inflation data and [hopefully] the long-awaited and often delayed Ethereum merger. Hold your breath for a rollercoaster ride.

Anthony Trenchev

co-founder, Nexo

Stocks have come under pressure this year as the Fed hiked interest rates in an attempt to control runaway inflation.

Cryptocurrencies, which are also risky assets, have failed. Nearly $2 trillion has been wiped from the entire crypto market since its all-time high in November. Bitcoin has fallen over 50% this year.

This drop was also driven by crypto-related issues, including the collapse of key projects and bankruptcies that have spread throughout the industry.

In the meantime, the Ethereum network will complete a long-awaited upgrade called Merge. This will transform the Ethereum blockchain from a proof-of-work model to a proof-of-stake model and drastically reduce the amount of energy required to run the network.

Proponents say this could pave the way for more widespread use of Ethereum, a token powered by Ethereum.

“This week, the cryptocurrency faced an unusual double whammy: US inflation data and [hopefully] the long-awaited and often delayed Ethereum merger. Hold your breath to ride the rollercoaster,” Nexo co-founder Anthony Trenchev wrote in a note on Monday.

“In an era filled with stories, nothing is more important than a merger in cryptocurrencies, and the whole world should listen to this, as the carbon footprint of Ethereum must be reduced by 99%.”

However, analysts warn that the merger will not necessarily speed up the infamous slow Ethereum network or lower the fees associated with transactions.

However, enthusiasm for the merger is growing. Since Ethereum hit its lowest level in a year in mid-June, the price of the world’s second-largest cryptocurrency has significantly outpaced the price of Bitcoin. Ether is up over 90% since June. 19 while bitcoin is up just over 20%, which raises the question of how much the merger has already been valued at.

The Federal Reserve is also expected to raise interest rates again next week at the Federal Open Market Committee (FOMC) meeting, another dark cloud looming over the crypto market.

“The merger could spark a ‘sell because’ situation in the cryptocurrency market and we still need to be careful ahead of the FOMC meeting next week. Bitcoin may continue to rise, but it may not be for long,” Yuya Hasegawa, a cryptocurrency market analyst at Japanese exchange Bitbank, said on Monday.

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