Buyers are returning to the crypto market after severe turmoil. Cooling US inflation is creating new hopes for interest rates and is driving Bitcoin & Co.
• Cooling US inflation fuels interest rate hopes and supports cryptocurrencies
• Bitcoin is approaching the 70,000 mark again
• Ethereum, XRP and Solana are increasing significantly
Bitcoin is scratching the 70,000 mark again
After recent turbulent weeks, there are signs of recovery in the crypto market: Bitcoin gained 4.03 percent to 69,730.52 US dollars within 24 hours and has temporarily regained the 70,000 US dollar mark. The major altcoins are also increasing noticeably: Ethereum rises by 5.68 percent to 2,070.21 US dollars, XRP increases by 7.44 percent to 1.46 US dollars and Solana even climbs by 8.06 percent to 86.41 US dollars.
This appears to be the beginning of a recovery after the market came under massive pressure at the beginning of February. In the meantime, Bitcoin had fallen towards $60,000. A robust US labor market report recently fueled additional interest rate concerns, as dpa-AFX reported. Investor confidence remained fragile and there were no major bargain purchases. CoinMarketCap’s Fear & Greed Index is currently only trading at 11 points and continues to signal extreme fear.
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Cooling inflation creates hope for interest rates
A recent report from CoinDesk shows that the upward movement is mainly due to macroeconomic stimulus. Accordingly, the US inflation data presented on February 13th was slightly lower than expected, with an increase of 2.4 percent year-on-year. The forecast was 2.5 percent.
This slight slowdown is fueling speculation that the US Federal Reserve will cut key interest rates earlier. Lower interest rates increase the attractiveness of risky investments such as stocks and cryptocurrencies, as safe investments lose a relative return advantage. CoinDesk also points to a capitulation event the previous week in which realized Bitcoin losses amounting to $8.7 billion were recorded. Such an adjustment could historically pave the way for stabilization, even if market sentiment remains heavily influenced by fear.
New ETF plans from the Trump environment
The sector is receiving additional attention from political developments in the USA. As CoinDesk reports, asset manager Yorkville America Equities has applied to the US Securities and Exchange Commission for approval for two new crypto ETFs. Plans include a Truth Social Bitcoin and Ether ETF and another product with a focus on the Cronos token.
The funds are closely related to the Truth Social brand, which is associated with US President Donald Trump. Should the SEC give the green light, this could further expand institutional exposure to the crypto market. Whether the current recovery is sustainable or simply represents a technical countermovement after the recent sell-off remains an open question.
Editorial team finanzen.net