Cryptocurrency prices may have remained low due to inflation and interest rate worries, according to Noelle Acheson.
Bitcoin (BTC) hovered below $30,000 early in Asia Wednesday as investors anticipated the Fed’s rate-hike campaign. Dogecoin (DOGE) rose 7% on confidence about Elon Musk’s Twitter activities.
After banking giant BlackRock applied for a bitcoin ETF, BTC rose beyond $30,000 a month ago on expectations that the world’s largest asset management may attract substantial quantities of conventional investors to digital assets. Since then, it’s hovered around that level, partially due to concerns over the Fed’s July 26 decision to raise rates by 25 basis points (bps).
At press time, BTC cost $29,140, up 0.2% from 24 hours earlier.
Noelle Acheson stated in her “Crypto is Macro” email on Tuesday that inflation and rate worries “could be what [has] kept crypto prices depressed.”
After The Wall Street Journal reported that Binance CEO Changpeng “CZ” Zhao had suggested in a private conversation that the cryptocurrency exchange’s affiliates had engaged in wash trading several years ago, and China’s policymakers forewarned of a difficult economic recovery, bitcoin fell as low as $29,000 at one point on Monday, its lowest level since June.
According to Acheson, Monday’s “BTC drop was sharp, which typically suggests a programmatic sale.” The new lower BTC level appears to be holding, supporting the notion that there simply aren’t enough new buyers prepared to take positions just yet. Normally, they rebound quite quickly.
Prior to Monday, DOGE hadn’t risen beyond $0.08, a mark it last did in April. The value of the popular memecoin and other cryptocurrencies increased on Tuesday as a result of a CoinDesk article that suggested billionaire Elon Musk’s audacious redesign of Twitter, now known as X, would increase their use.
Even before he acquired Twitter, Musk expressed a specific interest in DOGE in a number of statements, which boosted the token’s price. According to Brian D. Evans, CEO and founder of BDE Ventures, a Web3 venture studio and advisory organization, “Elon clearly has an affinity for DOGE, almost as part of a running joke, but I wouldn’t be surprised if he actually went through with enabling payments via DOGE.”
Ether (ETH), XRP, Solana (SOL)
The second-largest cryptocurrency by market value, Ether (ETH), was recently trading at roughly $1,850, up 0.4% from one day prior. Among other significant altcoins, XRP recently increased by 1.3%, while SOL—the native cryptocurrency of the Solana platform for smart contracts, increased by 0.9%.
A gauge of the overall success of the cryptocurrency market, the CoinDesk Market Index, recently increased by 0.3%. The trend indicators for Bitcoin and Ethereum on CoinDesk were in neutral area, reversing their earlier uptrend-mode stability.
Tim Frost, CEO of the digital wealth platform Yield App, wrote in an email to CoinDesk, “Some investors may be taking profits as they bet on hawkish language from the U.S. Fed following reports of rising house prices in the world’s largest economy. This will likely give the [Federal Open Market Committee] reason to continue hiking rates throughout the year.”