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US Inflation Reading Boosts Bitcoin and Ethereum Price, Market Remains Upbeat

UTC by Bhushan Akolkar · 3 min read
US Inflation Reading Boosts Bitcoin and Ethereum Price, Market Remains Upbeat
Photo: Depositphotos

The world’s second-largest cryptocurrency Ethereum (ETH) has been on a strong move over the last month. In the last 30 days, ETH has gained more than 80% amid all the positive developments surrounding The Merge upgrade.

On Wednesday, August 10, the US Bureau of Labor and Statistics reported inflation at 8.5% for the month of July 2022. The equity and the crypto market celebrated as the inflation numbers were less than the expected 8.7%. Soon after the news, Bitcoin and other cryptocurrencies popped up. The BTC price surged past $24,000. As of press time, BTC is trading 6.56% up at a price of $24,477 with a market cap of $466 billion. On the other hand, altcoins registered an even stronger jump with Ethereum (ETH) and all other top ten altcoins gaining anywhere between 10-15% in the last 24 hours amid the inflation news. The world’s second-largest cryptocurrency Ether (ETH) has gained more than 12% and is currently trading close to $1,900.

The declining trend in the inflation number shows that the Federal Reserve’s interest rate hikes are playing their part in it. This could mean that the Fed could be taking a less hawkish stance in the upcoming months. This could mean that money could start flowing back to risk assets like equity and crypto.

A few days back, Elon Musk already said that the period of peak inflation was behind us. He said that prices shall be heading south over the next six months. However, Musk expects to see mild inflation over the next 12-18 months. Speaking to The Block, Matt Weller, global head of research at Forex.com said:

Today’s “softer-than-expected inflation report might help reduce the headwind of rising US interest rates for Ethereum and other crypto assets”. He also adds that the Fed will want to see a “sustained trend of falling inflation before even considering a pivot to reducing interest rates.”

Ethereum Whale Accumulation and Merge Update amid Inflation News

The world’s second-largest cryptocurrency Ethereum (ETH) has been on a strong move over the last month. In the last 30 days, ETH has gained more than 80% amid all the positive developments surrounding The Merge upgrade.

Furthermore, on-chain data provider Santiment reported that the ETH transactions valued at $1,000 and more have shot up significantly. This comes against the backdrop of a strong whale accumulation.

On the other hand, Ethereum developers successfully implemented the Merge upgrade on the Goerli testnet on Wednesday. This was the final dress rehearsal before the Merge upgrade on the Ethereum mainnet on September 19.

The Goerli testnet simulates a process identical to The Merge upgrade on the Ethereum mainnet taking place next month. Tim Beiko, the coordinator for Ethereum’s protocol developers, told CNBC that they would be observing the testnet performance in the hours following the upgrade.

“We want to see the network finalizing and having a high participation rate amongst validators and also make sure we don’t hit any unexpected bugs or issues,” said Beiko.

Altcoin News, Bitcoin News, Cryptocurrency news, Ethereum News, Market News
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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