Bitcoin increases to its Peak Point in a month, crossing $18,000
Bitcoin today, Thursday 12 2023, soared to its highest bid in almost a month as traders banked on a slowdown in U.S. inflation and took in the news that the lawyers for the now-defunct cryptocurrency exchange FTX had discovered assets worth billions of dollars.
Late on Wednesday, the value of the biggest digital currency in the world, which has grown by around 5% in the previous day, was above $18,000 for the first time since December 14. According to CoinMetrics statistics as of 5 a.m. ET on Thursday, the price of one bitcoin was $18,154.35.
Attorneys for the defunct cryptocurrency exchange FTX said on Wednesday that they had discovered about $5 billion in “liquid” assets, including cash and digital assets. After the collapse of the cryptocurrency exchange in November, the revival will be a pleasant relief for FTX clients.
However, FTX lawyers cautioned that the $5 billion cash was so large that selling the assets could result in severe market negative pressure, which would lower their worth. Vijay Ayyar, vice president of business development and international at cryptocurrency exchange Luno, stated that Bitcoin has been on a downward trend for more than a year.
“Over the past year, there have been several negative events that have occurred, and if one looks at the price reaction to those events, it has generally been declining fewer and fewer — an indication that the market is willing to accept the news quite well, sell pressure is being absorbed, and thus we’re moving to an accumulation stage,” he continued. This may also imply that the market believes the worst for cryptocurrencies is passed and that the majority of bad news has already been included in prices. It is anticipated that Thursday’s release of U.S. inflation data would reveal a slowing of inflation. According to economists surveyed by Dow Jones, the index of consumer prices will have decreased by 0.1% from one month to the next in December.
Even while this would be less than the 7.1% increase in November and much below the 9.1% peak rate in June, inflation is still predicted to increase by 6.5% year over year. Investors are hoping that the decrease will encourage the U.S. Federal Reserve to cut interest rates.
In a bid to rein in surging inflation, the Fed and other central banks have been hiking interest rates over the last year or so. These actions caused equities and cryptocurrencies to fall substantially in 2022. The expectation is that the central bank will reduce interest rates to ease some of the burdens. A hot CPI reading may put a wrench in the works for risk-on assets like cryptocurrency, according to Ayyar.
“Today’s CPI statistics could be extremely telling,” he added. Ayyar cautioned that this or additional cryptocurrency-related bad news might push the price of bitcoin below $17,000, setting the way for further falls and a probable fall of the digital asset between $12,000 and $14,000. From its all-time high of $68,990 in November 2021, Bitcoin has fallen by nearly 74%. As traders abandoned riskier investments like technology and growth stocks, the cryptocurrency market lost close to $1.4 trillion in value last year.
The decline in Bitcoin and the larger digital currency market points to an escalating link with significant stock benchmarks like the Nasdaq Composite. In addition, crypto-specific problems like the failure of businesses and projects like FTX and Terra contributed to the decline.
However, Bitcoin has begun 2023 out strong, with a steady price increase over the previous 12 days. The surge in bitcoin prices on Thursday encouraged the use of other digital currencies. While Binance’s BNB token increased by 3% to $283, Ether, the second-largest coin, increased by roughly 5% to $1,397.78. In stark contrast to rival exchanges that have reduced staff, Binance CEO Changpeng Zhao told CNBC on Wednesday that the exchange aims to increase hiring by 15% to 30% in 2023. Binance, which had previously set aside $1 billion for one fund to support the sector following the demise of FTX, has also been plagued by concerns about the soundness of its reserves. The company’s so-called proof of reserves auditor, Mazars, halted all cooperation with cryptocurrency businesses in December. According to Binance, its assets are greater than its liabilities.
