Bitcoin prices are trading above $24,000 in August 2022, after the fall caused by high inflation and the Fed’s hike in interest rates in June 2022.
Bitcoin Recovers after High Inflation Hits Prices
Inflation in the US hit a four-decade high of 9.1% in June. Crude prices jumped higher after the Ukraine war, causing an increase in food and commodity prices. The consumer price index year-on-year in the United Kingdom was 9.4% in June 2022.
In the Euro region, the inflation rate was 8.9% in July, at a new all-time high. Central banks of the leading countries, the Fed, the Bank of England, and the ECB, have hiked rates to curb inflation.
The Fed has taken steps to combat inflation, which is at a 4-decade high. Cryptocurrencies fell by half when the Fed hiked interest rates.
The crypto market fell lower during May and June of 2022. High inflation in developed countries like the US, UK, and the Euro has worried the forex, crypto, and stock markets, across the globe. The collapse of major crypto tokens has wiped off a large sum of investment money from ordinary investors.
The increasing inflation rate in the global economy sent waves of pessimism among investors. The forex and crypto markets fell lower with the global economic downturn. Business sentiment was lower, and job cuts became rampant. Leading cryptocurrency players started to withdraw their investment which brought volatility in crypto prices. Investors started to wind down their portfolio exposure as the crypto market is vulnerable to any change in economic conditions. After a brief lull in the crypto market, prices are starting to pick up.
CPI data from the United States came better than expected in July, and crypto prices surged higher after the CPI news release from the US.
The crypto market is in a bull grip after the fall during May and June 2022. Leading cryptocurrencies show signs of recovering as sentiment improves in the crypto market after the turmoil.
Investors prefer the best cryptocoins for successful trading. The rally in recent weeks in crypto prices has brought some consolidation in crypto prices.
Bitcoin Prices Surge to Three-Month High in August
Bitcoin prices surged to above $24,000 on Friday, August 14, 2022. BTC slipped below $30,000 in the first week of June, and it is the first time BTC prices recovered to trade above $24,000 levels.
Bitcoin prices were at lifetime highs at $66,900 in October 2021. It slipped to $17,630 in June 2022.
Ethereum software upgraded Merge, which has helped ETC prices to rise above $2,000 last week. Merge may happen in September. Merge will allow proof of work fork, which will help to settle macro transactions.
ETH prices were trading at a three-month high at $2,028 in the second week of August 2021. It touched a low of $880 in June 2022.
Bitgert blockchain is expected to perform better than Ethereum as it is faster and cheaper. The blockchain adoption rate is quicker than ETC.
Cardano was developed to create a platform for innovators and visionaries.
Polkadot allows peer-to-peer transactions and cross-blockchain transfers of tokens, assets, and data. It helps to secure multiple blockchains through validators. The specialized blockchain secures communication through parachains.
Solana is the fastest blockchain with Defi, Web3, and NFTs. It operates in NFT marketplaces like Solanart, Digital Eye, and Metaplex.
Though the crypto market is rallying, it is well below the life-high levels reached in November 2021.
Meme Coins Trade Higher
Dogecoin is the first and the largest meme coin to enter the crypto market. Doge gained fame from the tweets by Elon Musk, the CEO of Tesla. The Doge value rose higher whenever Musk published a tweet on the meme coin. It also gained public support when Musk revealed his investment in the Doge crypto.
Shiba Inu is the second-largest meme coin that was developed as a competition to Dogecoin. It was also known as the Dogecoin killer. It has a limited supply and is one of the best trading cryptos after Dogecoin.
Investors prefer to maintain a portfolio with different cryptocoins. The global market cap is currently at $1.18 trillion.
Recent Cryptocurrency Issues
Tornado Cash faced some issues with the sanctions by the Office of Foreign Asset Control (OFAC), a federal agency that works under the Treasury Department. It faces allegations of funding the nuclear weapons program of North Korea.
The Enforcement Directorate froze the bank balances of Zanmai Labs, the owner of WazirX. The ED is investigating WazirX, the Indian cryptocurrency platform, on money laundering allegations.
The Fed’s decision to curb high inflation led to the downfall in crypto prices. BTC prices are trading on a positive note for the fifth consecutive day. There is optimism in the crypto market after the recent carnage when BTC prices slipped to $17,000 in June.