2022 has been a challenging year for cryptocurrency, as the market took a significant dip and remained rather stagnant for the back half of the year, but Bitcoin and Ethereum have seen slight gains after the latest Consumer Price Index report. The rate of inflation slowed more than expected in the month of November, which gained the attention of crypto investors around the world. The CPI rose just 0.1% in November from the prior month, which is slower than October’s pace of 0.4% increase.
Back in November, we got the news that the popular crypto exchange FTX filed for Chapter 11 bankruptcy. FTX’s ex-CEO, Sam Bankman-Fried, was just arrested this week by law enforcement in the Bahamas. It’s likely that he will face charges of wire fraud, security fraud, conspiracy, and money laundering.
Bitcoin, the world’s leading cryptocurrency, has seen a significant drop in trading this year. With troublesome headlines surrounding the crypto world, it’s no surprise that Bitcoin hasn’t seen notable gains in some time. Is the latest inflation news the kickstart Bitcoin needs to re-enter a gainful trend?
Since the Consumer Performance Index report for November was released, Bitcoin has jumped by 4% and is now trending around $17,600. Ethereum, the second most traded coin, jumped over 5% within a 24-hour period, trending around $1,320. Popular “meme-coin” Dogecoin also saw a gain of 5%.
Crypto traders are paying close attention and studying the market data for signals that the Federal Reserve may throttle its plan to increase interest rates. The Fed has steadily raised rates by .75% per quarter in hopes to combat inflation, but this only harms risky assets like stocks and cryptocurrency markets. Unfortunately, Federal Reserve Chair Jerome Powell has stated that he doesn’t expect the Fed’s rising interest rate plan may not come to a halt until a peak in 2023 when rates are estimated to be around 5%.
Ultimately, we don’t expect to see a bull run as we close out 2022, but some trend forecasts predict that crypto could see a healthy rise in 2023 as the market (hopefully) regulates itself.
Jennifer is a native Houstonian (go Astros!) with a knack for creating digital works of art. She has expansive experience creating content and branded collateral for Fortune 500 companies, as well as small local businesses. When she’s not buried in her laptop, Jennifer is the marketing director for a world championship circuit barbecue cook off team and pet mom to dog (Milo) and Guinea pig (Piggy Smalls).
