Bitcoin has surpassed $22,000, continuing a week-long rally in anticipation of US inflation figures and an eagerly awaited Ethereum system revamp.
At 9:45 p.m., the largest global virtual currency had reached $22,341.50. According to CoinDesk data, the price of Bitcoin rose slightly in the early hours of Sunday before falling slightly. At 4:03 a.m., Bitcoin was priced at $22,203 on Monday, 5:00 p.m. ET.
Bitcoin has surged approximately 17% since dropping below $19,000 on Wednesday, its lowest point as of June.
This comes on the heels of a positive week for US equities a week ago. Bitcoin is highly-correlated with stock markets, especially the Nasdaq, and frequently increases when the technology-heavy index goes up.
Crypto stakeholders are anticipating the release of the August CPI report on Tuesday to see where inflation is bound, which could provide hints about future strategic moves by the United States.
This year, equities have come under stress as the Fed has raised interest rates to regulate high inflation.
Virtual currencies, which are hazardous assets, have taken a beating. Since its all-time peak in November, the cryptocurrency market has lost roughly $2 trillion. This year, Bitcoin has dropped by far more than 50%.
This downturn has additionally been fueled by crypto-specific challenges such as the failure of vital initiatives and widespread insolvencies.
In the meantime, the Ethereum platform should finalize the long-awaited integration. This should convert the blockchain platform from a proof-of-work toward a proof-of-stake framework, dramatically reducing the amount of energy needed to run the system.
Promoters argue that this may open up the possibility for a relatively broad utilization of Ether, the Ethereum coin.
This last week, cryptocurrency confronts an unexpected double whammy: US money supply statistics and ideally the long-awaited and frequently deferred Ethereum integration. Get ready for a rollercoaster ride, said Antoni Trenchev, founder of Nexo, in a comment earlier this week.
In an entire planet overflowing with anecdotes, none is greater than the integration of digital money, and it’s one that the remainder of the globe should pay attention to, with Ethereum’s environmental cost set to be reduced by 99%.
Experts, however, advised that the merger would not inevitably accelerate the Ethereum blockchain, which is notoriously slow, nor does it decrease processing fees.
Nonetheless, anticipation for the merger has grown. Since Ether’s year-low in mid-June, the value of the world’s second-largest virtual currency has further outperformed that of Bitcoin. Since June, Ether has increased by more than 90%, whereas Bitcoin has increased slightly more than 20%, it is unclear how much the merger has already been valued in.
The Reserve Bank is also extensively predicted to increase financing costs once more this coming week when its Federal Open Market Committee (FOMC) convenes, casting yet another shadow over the cryptocurrency industry.
Furthermore, the Merge may cause a sell the actuality situation in the cryptocurrency industry, and we must remain cautious ahead of next week’s Federal open market committee. Bitcoin’s rally may proceed, but it may be brief, according to Yuya Hasegawa, virtual currencies industry analyst at Japanese export Bitbank, in a comment on Monday.
The Bigger Picture
Ethereum transitioning to a new system that should prove to be way more cost-effective and more environmentally friendly puts pressure on other well-known coins to consider the possibility of doing so as well. A failure to do so would show gross neglect for the current issues faced by the world.
The current market is massively affected by the socio-economic views of the population at large, and Ethereum making this move to a new system would bring those who don’t under massive scrutiny. Major market players could be targeted for their wastefulness and, as a result, lose even more of the value that they have already lost. Bitcoin, in particular, may face extreme challenges as it is one of the major contributors to environmental damage on the entire planet.
The Bottom Line
The transition of Ethereum is a massive mover in the crypto space, as it is moving us into a new, more sustainable era of virtual currency. It should be extremely exciting to see the ramifications that this has on the rest of the industry.