Bitcoin jumps above $18,000 to highest level in a month

Cemile Bingol | Digitalvision Vectors | Getty Images

Bitcoin on Thursday surged to its highest price in almost a month as traders bet on a slowdown in US inflation and processed the news that lawyers at defunct crypto exchange FTX had found billions of dollars worth of assets.

The world’s largest digital currency climbed above $18,000 for the first time since December 14 late Wednesday, gaining about 5% in value over the past 24 hours. Bitcoin was trading at $18,154.35 as of 5 a.m. ET Thursday morning, according to CoinMetrics data.

On Wednesday, lawyers for collapsed crypto exchange FTX said they found around $5 billion in “liquid” assets, including cash and digital assets. The rebound will be a welcome boon for FTX clients after the crypto exchange imploded in November.

FTX attorneys nonetheless warned that the $5 billion cache is so high that selling the assets could create significant downward pressure on the market and lower their value.

“Bitcoin has been in a downtrend for over a year, which is a standard bear market period in crypto,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC via email Thursday morning.

“We’ve had a lot of negative events over the past year and generally speaking when you look at the price reaction to those events it’s been going down less and less – an indication that the market is taking the news quite well, selling pressure is being absorbed, and hence moving “We’re entering an accumulation phase,” he added. “This could also mean that the market believes the worst is over for crypto and that most of the negative news is now priced in.”

FTX collapse shakes crypto to its core. The pain may not be over yet

US inflation data, due out on Thursday, is expected to show a moderation in inflation. Economists polled by Dow Jones expect the CPI to have fallen 0.1% month-on-month in December.

Inflation is still expected to rise 6.5% yoy, although that would come after a jump of 7.1% in November and well below a peak of 9.1% in June. Investors are hoping the decline will put pressure on the US Federal Reserve to reverse rate hikes.

The Fed and other central banks have hiked interest rates over the past year to tame rising inflation — in moves that have forced stocks and cryptocurrencies sharply lower in 2022.

Now there is hope that the central bank will cut interest rates, thereby taking some pressure off risky assets.

“Today’s CPI numbers could be pretty telling, and hot CPI push could definitely thwart risky assets like crypto,” Ayyar said.

This or more negative news in crypto could see Bitcoin’s price fall below $17,000, Ayyar warned, setting the stage for further declines and a possible drop in the digital asset within a $12,000-$14,000 range.

Bitcoin is down about 74% from its November 2021 all-time high of $68,990. Nearly $1.4 trillion in value was wiped out of the cryptocurrency market last year as traders sold off risky assets like tech and growth stocks.

Read more about technology and crypto from CNBC Pro

Bitcoin and the broader digital currency market also slumped, indicating an increasing correlation with major stock benchmarks like the Nasdaq Composite.

The slump was also caused by crypto-specific issues, including the collapse of projects and companies like FTX and Terra.

However, Bitcoin has started 2023 on a positive note as its price has steadily increased over the past 12 days.

Other digital currencies were boosted by Thursday’s surge in bitcoin prices. Ether, the second largest coin, is up nearly 5% to $1,397.78, while Binance’s BNB token is up 3% to $283.

Binance CEO Changpeng Zhao told CNBC on Wednesday that the exchange plans to increase hiring rates by 15% to 30% in 2023, in stark contrast to other exchanges that have cut jobs.

Binancey, which previously earmarked $1 billion for a fund aimed at propsing up the industry following the collapse of FTX, has itself been plagued by fears about the health of its reserves. The auditor working on the company’s so-called proof of reserves, Mazars, suspended all work with crypto companies in December.

Binance says it has more than enough assets to cover liabilities. Bitcoin jumps above $18,000 to highest level in a month

Sportsasff is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button