Crypto Currency News

Trending News

Ethereum Classic

Bitcoin Climbs Above $18,000; Ethereum and Dogecoin Are Rising as Well

What happened

Cryptocurrencies rose Thursday morning as new inflation data for December was in line with expectations.

Since Wednesday afternoon, the world’s largest cryptocurrency, Bitcoin (BTC 4.65%), has traded roughly 3.3% higher and had topped $18,000 as of 10:12 am ET today. The world’s second-largest crypto, Ethereum (ETH 4.86%)traded roughly 3.5% higher, while the meme token Dogecoin (DOGE 3.36%) was up about 1.1%.

So what

Investors were anxiously awaiting key new inflation data released this morning. The US Bureau of Labor Statistics reported that the Consumer Price Index (CPI), which tracks the cost of a market basket of goods and services, fell 0.1% in December from November. On a year-over-year basis, the CPI came in 6.5% higher, which is in line with what economists had been expecting.

Image source: Getty Images.

More specifically in the CPI, food prices only rose 0.3% on a monthly basis, which is their smallest month of growth in some time. Energy prices dropped 4.5% and used-vehicle prices fell another 2.5%. But costs for shelter, transportation services, and medical care all grew on a monthly basis.

Shelter prices grew 0.8% in December, which is higher than the growth they experienced in November. The rent index was up 0.8%, and lodging away from home increased 1.5% after falling in November. Shelter is one category in particular that has the power to make inflation more persistent.

December was the first time in 2 1/2 years that prices actually fell on a monthly basis. But the dow was up only modestly, as of this writing, after what has been a largely positive week, so investors might have already priced some of this news in. Crypto prices seemed to be largely in the green this morning.

“Bitcoin has been in a downtrend for over a year now, which is a standard period of a bear market in crypto,” Vijay Ayyar of the crypto exchange Luno told CNBC this morning.

He added: “We’ve had many negative events transpire over the past year, and if one looks at the price reaction to those events, in general it’s been declining less and less — an indication that the market is accepting the news quite well , sell pressure is being absorbed, and hence we’re moving to an accumulation stage.”

In other news, Samsung Asset Management Hong Kong, a division of Samsung Asset Management, is preparing to launch a Bitcoin futures exchange-traded fund (ETF), as investors in the region get more interested in crypto. The ETF will follow the coin’s spot price by investing in Bitcoin futures.

Now what

At this point, cooling inflation is badly needed because it could lead to more of a risk-on environment. Investors have really fled the industry in recent months after the FTX debacle, which has cast a dark cloud over crypto.

Ultimately, I do think Bitcoin and Ethereum will end up being good long-term buys. Nothing from the FTX meltdown has changed my mind about these two cryptocurrencies, and I still believe they are the two best right now. While it could take longer to get past the FTX scandal, I do think crypto is here to stay.

I continue to have very little interest in Dogecoin due to its lack of utility and the fact that its blockchain network is nothing special from a technical standpoint.

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Comments are closed.