The Fed now appears likely to stop its year-long campaign of monetary hawkishness
Bitcoin at least for a while was helped by waning inflation as reflected in Tuesday’s release of the May Consumer Price Index (CPI).
The token was recently changing hands at $25,846, 0.2 per cent lower over the last 24 hours and off the over-$26,000 in the hour after the U.S. Bureau of Labor Statistics announced that the Consumer Price Index had increased 4 per cent, more than the estimated 4.1 per cent and then April’s 4.9 per cent.
Bitcoin has been flat below $26,000 for much of the last four days as investors set aside concern about U.S. Securities and Exchange Commission (SEC) lawsuits against crypto exchanges Binance and Coinbase, and waited for the latest inflation figures and Wednesday’s Federal Reserve interest rate decision.
The Fed now appears likely to stop its year-long campaign of monetary hawkishness. Just a year back, the Consumer Price Index was at 8.6 per cent, prompting the Fed to hike the Federal Funds rate by 75 bps and sending risk-on assets soaring.
While today is good news for the U.S. economy and Bitcoin, any sway that may come from tomorrow’s interest rate decision or the looming recession on the U.S.’s horizon is also likely to prove favourable for crypto assets, Tim Frost, Chief Executive Officer of Yield App stated to CoinDesk. Even altcoins, some of which have shed up to 30 per cent over the last week, will benefit.
Frost proposed that the Securities and Exchange Commission suits had delivered “certainty” to markets by ending speculation about whether the agency would take legal action against two of the crypto industry’s leading businesses. The suits may also compel the courts and regulators to settle on a designation for cryptos as securities, commodities or otherwise.
With U.S. investors perhaps now largely shaken out of these assets, we could see the start of fresh investment in these tokens that is not at all associated with the US economy or US policies, Frost stated.
Ether followed bitcoin’s lead, increasing initially before retreating. Ether was recently trading at around $1,735, roughly where it sat on Monday. Among the 19 tokens cited in either the Binance or Coinbase suits, or both, ALG AND MATIC, the tokens of the Polygon and Algorand smart contracts blockchains, were recently 0.3 per cent and 0.8 per cent higher, while AXIE, the native crypto of gaming platform Axie Infinity, dropped marginally. Binance’s BNB token recently rose 3.3 per cent.
