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Featured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your SeatFacebook iconLinkedin iconTwitter iconFeatured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your Seat
Bitcoin (BTC) hung precariously around $30,000 Wednesday afternoon after the latest Consumer Price Index (CPI) report showed inflation cooling slightly but not by as much as economists had expected.
The largest cryptocurrency by market capitalization was recently at $30,030, off a few fractions of a percentage point over the past 24 hours, according to CoinDesk’s data. BTC’s price reached as high as $30,548 earlier Wednesday after the Bureau of Labor Statistics’ much-watched inflation reading showed the CPI rising 0.1% increase in March, slower than economists’ 0.2% forecast for the month and then February’s 0.4% reading. On a year-over-year basis, the CPI was higher by 5%, down from 6% in February and against expectations of 5.2%.
BTC’s profit-taking is “intensifying” following the report, Edward Moya, senior market analyst at foreign exchange Oanda, wrote in a Wednesday note.
“It seems the momentum rally for bitcoin might be over for now,” Moya wrote. “Inflation hedge and or a breaking of its correlation from equities might subside for a while.” He added that BTC looks poised to consolidate as “it will clearly need a robust catalyst to keep the rally going.”
Ether (ETH), the second-largest cryptocurrency in market value, was recently trading at $1,914, up 0.3% from Tuesday, same time. Validators and market watchers are eyeing Ethereum’s Shanghai (or Shapella) upgrade, which is scheduled to go live at 6:27 p.m. ET (22:27 UTC).
Read more: LIVE BLOG: Ethereum’s Shanghai Upgrade
Crypto analysts and traders are split on the event’s market impact with some expecting ETH selling pressure to send the token’s price downward, but others foreseeing little significant price impact.
“While there is plenty of short-term concern around what happens once staked ETH is unlocked, long term the ability to enter and exit at will opens the doors for new entrants to the market that may have been wary of locking their funds for an indeterminate period of time,” Jim Myers, founder and chief technology officer at blockchain analytics platform Flipside Crypto, told CoinDesk in an email.
BTC and ETH have risen by more than 6% and 4%, respectively, in the past seven days. The CoinDesk Market Index (CMI), which measures the overall crypto market performance, was down 0.2% for the day but rose by 2.2% in the past seven days.
Equity markets turned mixed on Wednesday afternoon. The S&P 500 and Dow Jones Industrial Average (DJIA) were recently trading up 0.3% and 0.5%, respectively. The tech-heavy Nasdaq was almost flat.
Edited by James Rubin.
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