The price of bitcoin and other cryptocurrencies has been under pressure in 2022 as traders react to a number of significant industrial collapses.
Following the increase in stocks following the U.S., bitcoin surpassed $23,000. The Federal Reserve increased interest rates but signaled that future increases might be less rapid.
Cryptocurrencies and American stocks have a strong relationship, especially the Nasdaq, which increased by 4% on Wednesday.
At roughly 4:00 p.m., the price of bitcoin was $23,740.00. ET on Thursday, up roughly 4.4%, according to CoinMetrics data.
The Federal Reserve increased its benchmark interest rate by 0.75 percentage points on Wednesday in an effort to combat rising prices without sending the economy into a downturn. Jerome Powell, the head of the central bank, however, said that the rate increases might slow down, which spurred an equities surge on Wednesday that spread to Thursday’s trade in Europe and Asia.
Given that we now have two months until policymakers next discuss monetary policy, the completion of the Fed meeting on Wednesday creates a summer window for a Bitcoin relief rally, according to Antoni Trenchev, co-founder of the cryptocurrency wallet Nexo.
After many failed attempts this month, Bitcoin is attempting to stage a long-term rally. Since mid-June, the biggest cryptocurrency in the world has been trading between $20,000 and slightly over $24,000 after a severe drop this year erased 50% of its value.
After shrugging off this month’s fantastic U.S. inflation figures and remaining unfazed when Tesla said it had liquidated the majority of its bitcoin holdings, Trenchev said, “the next 24 hours will be a true test of Bitcoin’s re-discovered durability.”
Last Monday, Tesla said that it has sold 75% of its bitcoin holdings.
This year has been extremely difficult for the cryptocurrency industry, with billions of dollars being lost as a result of business failures and macroeconomic problems. Crypto lending platform Celsius and hedge fund Three Arrows Capital are two well-known examples that have both declared bankruptcy and lost many investors.
Players in the cryptocurrency market who have previously said they are unsure of when the shakeout and deleveraging will end.
Improving Bitcoin Rally
The price of Ether, the native token of Ethereum, increased by as much as 11% to $1,783 and has increased by 29% intraday on Tuesday, marking the greatest two-day gain since January 2021. The value of the digital currency has fallen by nearly 50% so far this year.
Bitcoin increased by as much as 6.2% to $US24,195. The 15% gain over the past two days is the highest intraday gain since June 20. Since December, the largest digital token by market value has decreased by 48%.
The increase in price reflects rising optimism that Ethereum’s transition from the present system, which relies on miners, to a more energy-efficient system, which uses staked currency, is imminent. It is anticipated that this so-called proof-of-stake system would be implemented in September.
A number of events are being planned for prospective stakers and other community members in the upcoming weeks as Ethereum developers have indicated steady progress in testing the new system.
“The Ethereum merge will turn the protocol into a proof-of-stake chain and provide more utility for the token, changing the tokenomics, and providing excitement for further decentralization for Ethereum going forward,” said Paul Veradittakit, a partner at Pantera Capital.