Why a Crypto Price Surge Added $200 Billion to Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon, and Solana in 2023

ethereum and other major cryptocurrencies suddenly jumped higher after trading sideways last week (and some think the rally has only just begun).

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The price of bitcoin has climbed to nearly $23,000 per bitcoin from a low of less than $20,000 this week, adding 7% in the past 24 hours. Ethereum price rose by a similar amount, mirroring the other ten largest coins BNB
, cardano, dogecoin and polygon. Solana linked to FTX, an Ethereum challenger, added almost 20%.

Bitcoin and Crypto’s Sudden $200 Billion Rally in 2023—who saw smaller coins leave bitcoin in the dust– was blamed on growing hopes that the Federal Reserve and other central banks will slow interest rate hikes, although some have warned that traders could get ahead of themselves.

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“The last two months have undoubtedly brought indicators of a more positive environment with regard to inflation, as well as the revival of the reopening of the Chinese economy,” said Max Coupland, director of CoinJournal, in comments by e-mail.

Data last week showed that the pace of inflation in the United States fell to its lowest level in more than a year in December, a sign that price pressures may have peaked. Last year, the Fed made four consecutive three-quarter-point rate hikes, followed by a half-point hike in December.

“I worry if investors jump on the assumption that this means the Fed will now pivot sooner than expected,” Coupland added. “Fed Chairman Jerome Powell has insisted that rates will not come down until inflation is firmly under control, and we are still a long way from the 2% target, while uncertainties such that the Russian war in Ukraine still looms as highly unpredictable.”

Over the past few days, Federal Reserve officials have warned that interest rates must rise to completely eradicate soaring inflation that hit a 40-year high in 2022. The Fed will then meet to decide on rates in early February, with traders pricing in a 25 basis point rate hike.

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Meanwhile, bitcoin, ethereum, and other major cryptocurrencies appear to have severed their connection to the US stock market.

“While US equity indices clearly broke their New Year’s rally on Wednesday, bitcoin still holds its ground above $20,000,” Yuya Hasegawa, crypto market analyst at Bitbank, said via email. .

“Indexes may drop further to find a local low in the coming days, bitcoin is likely to be supported at the psychological $20,000 level. In other words, bitcoin’s decline is likely to be shallow.”


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