Bitcoin and U.S. cash.

Bitcoin, Ether rise despite hotter-than-expected U.S. inflation

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Bitcoin rose in Wednesday morning trading in Asia to move back above US$22,000 as investors shrugged off a seeming U.S. regulatory crackdown on digital assets and data showing U.S. inflation for January was above forecasts. The world’s leading cryptocurrency led other tokens higher, with Ether and all other top 10 non-stablecoin cryptocurrencies gaining ground. Cardano posted the largest increase. However, most tokens remain underwater when compared to prices seven days ago.

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Fast facts

  • Bitcoin rose 1.9% in the past 24 hours to US$22,220 at 8 a.m. in Hong Kong, but is down 4.4% over the past seven days, according to CoinMarketCap. Ether jumped US$3.3 to US$1,556. The token is off 6.9% for the week.
  • Cardano gained 7.5% to trade at US$0.38, though not enough to make up the 3.2% decline for the past seven days. Cardano’s gain comes amid the successful deployment of the Valentine upgrade, which is intended to make it easier for developers to build cross-chain applications on the Cardano blockchain. 
  • Polygon rose 6.1% to change hands at US$1.26, though off 0.8% for the previous seven days. Solana jumped 5.1% to US$21.84, but is down 8.5% from Wednesday last week.
  • The crypto market capitalization rose 3.1% to US$1.03 trillion, with total trading volume up 1.64% to US$58.83 billion. Markets have been rocked the past week after regulatory authorities in the U.S. took aim at crypto staking services and certain stablecoins.
  • U.S. equities had a mixed day of trading on Tuesday. The Dow Jones Industrial Average lost 0.5% and the S&P 500 Index was little-changed at 0.1% lower, but the Nasdaq Composite Index finished the day 0.6% higher. 
  • Tuesday’s Consumer Price Index (CPI) report showed prices rose 0.5% in January from the previous month or slightly higher than the 0.4% forecast by economists. The increase year-on-year came in at 6.4%, according to the U.S. Labor Department. While this was also higher than the forecast 6.2% it shows inflation for the past several months remains on a downtrend in the world’s biggest economy. 
  • The year-on-year CPI in December came in at 6.5% from the 7.1% recorded in November, which in turn declined from October’s 7.7% and the 8.2% in September.
  • The Fed, which has said it wants inflation back in the 2% range, has raised interest rates multiple times since last March to reverse the inflation surge. 
  • Analysts at the CME Group predict a more than 90% chance that the Fed will raise rates by a further 25 basis points at its meeting next month. U.S. interest rates are currently at 4.5% to 4.75%, the highest in 15 years, and Fed officials have repeatedly indicated they could raise rates to as high as 5% to get inflation back to the central bank’s target range.

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