Bitcoin rose to its highest price in nearly a month on Thursday as traders gambled to curb US inflation and digested news that lawyers for the defunct cryptocurrency exchange FTX had uncovered billions in assets.
On Wednesday night, the world’s largest digital currency topped $18,000 for the first time since December 14. It increased in value by approximately 5.233% in the previous 24 hours. Bitcoin was trading at $18,154.35 on Thursday morning.
The $5 billion stash was so sizable that selling the assets could significantly affect market volatility, lowering their value. On Thursday, US inflation data should ease. Dow Jones economists predict the consumer price index will fall 0.1% per month in December.
Despite falling from 7.1% in November and well below the peak rate of 9.112% in June, inflation should still rise by 6.5% per year. Investors expect the drop to put pressure on the US Fed to cut interest rates.
The Fed has been raising interest rates for the past year to combat rising inflation. However, this will result in significant falls in the prices of stocks and cryptocurrencies in 2022.
What does the future hold for Bitcoin?
Bitcoin is down about 74% from its all-time high of $68,990 in November 2021. Last year, the cryptocurrency market lost nearly $1.4 trillion as traders dumped risky assets like technology and growth stocks. Bitcoin and the digital currency market in general have also fallen, indicating an increasing correlation with major stock indices such as the Nasdaq Composite. The rise in bitcoin prices on Thursday boosted the value of other digital currencies. The second largest coin, ether, gained almost 5% to $1,397.78, while Binance’s BNB token gained 3% to $283.
The bitcoin price could fall below $17,000 due to this or other negative cryptocurrency news, setting the stage for further declines and a possible fall of the digital asset between $12,000 and $14,000.
