Cryptocurrency Rally Continues: Bitcoin, Ethereum Soar Near ATHs
17. Januar 2023
• Cryptocurrency prices have surged in the last 9 months, with Bitcoin trading near $21,000, Ethereum at $1,500 and altcoins performing strongly.
• Optimism is high that the Federal Reserve will pivot off its high-interest policy sooner than expected, following cooler inflation data.
• Some analysts fear the market is premature in pricing in an earlier-than-expected Fed pivot.
Cryptocurrency markets have been resurgent in the first month of 2021, with Bitcoin, Ethereum and altcoins all surging in what is now the strongest rally in nine months. Bitcoin, the world’s number one cryptocurrency, is trading close to $21,000, while Ethereum, the second-largest by market capitalization, has crossed $1,500. Other coins, such as Solana and Dogecoin, are also seeing strong gains, with the former up by 130% since the start of the year.
The rally appears to be driven by optimism that the Federal Reserve will pivot off its high-interest policy sooner than expected, following cooler inflation data. The US central bank is scheduled to meet on February 1st and will decide on the latest interest rate policy. If it does decide to reduce rates, it could be seen as a sign that it is looking to stimulate the economy, which would be good news for the cryptocurrency markets.
However, some analysts fear that the market is premature in pricing in an earlier-than-expected Fed pivot. They point to the fact that the US government is still in the midst of a stimulus package, which could lead to higher inflation and ultimately push interest rates back up. There are also concerns that the crypto rally is being driven by speculation and that if the Fed does not announce a rate reduction, the markets could suffer a severe correction.
Regardless, the crypto markets have seen impressive gains in January and are showing no signs of slowing down. It will be interesting to see what happens when the Fed meets in February and if the current rally will be sustained or if it will be short-lived. In the meantime, investors should be cautious and do their own research before investing in any crypto asset.