The cryptocurrency market in the past week showed signs of a slight recovery. On early Friday, the total crypto market capitalisation (m-cap) hit the $1 trillion mark. Bitcoin, the largest cryptocurrency by m-cap, crossed the $ 20,000 mark, and Ethereum was above the $ 1,500 mark for the first time since it concluded “Merge” in September, market data showed.
Experts told Business Standard that the current rise in the crypto prices was due to the expectations that the Federal Reserve (Fed) might soften its stance in fighting inflation due to the rising fears of recession.
“The crypto market cap reclaimed the $1 trillion mark with sustained gains for Bitcoin and Ethereum in the past 24 hours as they broke the important price resistances of $20k and $1.5k respectively,” crypto exchange CoinDCX’s research team said.
“Markets are rising in expectations of a global economic slowdown which will prompt the FED to potentially soften its hawkish stance. Markets are still expecting a 75 bps hike in the upcoming FOMC meeting, however the odds for a 50 bps hike have increased slightly,” it added.
The Fed is scheduled to announce its interest rate revisions on November 2. The crypto m-cap had fallen to $980 billion after hitting the $1 trillion mark on Friday.
Bitcoin was up 6 per cent last week and was trading at $20,195 on Friday, as per coinmarketcap. Ethereum, on the other hand, was trading at $1,506, over 17 per cent up in the past seven days. It can be attributed to the fall in the supply of the digital token.
With the shift to the proof-of-stake (PoS) model, “ETH is no longer mined and there are significantly fewer units of it entering the market every day, by a factor of up to 90 per cent,” according to an analysis by crypto asset management firm Kunji.
“The entire supply of Ethereum appears to have peaked, and it is now just a matter of days before it might go below the level at which it was circulating at the time of the Merge,” it added.
However, the most significant move was seen in Dogecoin (DOGE). As the announcement of the acquisition of Twitter by Elon Musk made it to headlines, the meme coin rallied around 40 per cent in the last week. In the last 24 hours alone, it was up 6 per cent, according to coinmarketcap.
“Elon Musk reportedly promised to conclude the Twitter acquisition by Friday. Once the news was out, it fueled the growth of Dogecoin (DOGE)…The billionaire shared a roadmap to make the meme coin for payment on the social media platform in question,” Edul Patel, CEO and co-founder of crypto investment platform Mudrex, said.
It is unclear when or why DOGE captured Musk’s attention, but he has spent years talking up the token several times through his tweets.
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