The Bitcoin cryptocurrency made a big jump today, Thursday, to reach its highest level in about a month.
According to Arabiya.net, Bitcoin jumped above $18,000 for the first time since December 14 in late trading on Wednesday, as its value increased by about 5% in the past 24 hours.
Bitcoin was trading at $18,197 as of 10:51 GMT Thursday, according to CoinMetrics data.
Traders betting on slowing inflation in the United States, as well as news that lawyers for cryptocurrency exchange FTX had found assets worth billions of dollars, raised the hopes of its users.
On Wednesday, lawyers for collapsed cryptocurrency exchange FTX said they had found about $5 billion in liquid assets, including cash and digital assets. The recovery will be a welcome boon for FTX clients after the cryptocurrency exchange crash in November, according to CNBC.
However, FTX lawyers warned that the monetization of $5 billion worth of crypto assets is so high that selling them could lead to significant negative pressure on the market, and lead to a decline in its value.
In turn, Vice President of Corporate and International Development at Luno cryptocurrency exchange, Vijay Aiyar, said: “Bitcoin has been on a downtrend for more than a year now, which is a record period for a cryptocurrency bear market.”
On the other hand, the US inflation data due on Thursday is expected to show a decline in inflation. Economists polled by Dow Jones expect the consumer price index to decline by 0.1% on a monthly basis in December.
Inflation is still expected to pick up at 6.5% y/y although this may be down from the 7.1% rise in November and far from the peak rate of 9.1% in June. Investors hope that the downturn will put pressure on the US Federal Reserve to reverse the interest rate increases.
The Fed and other central banks have raised interest rates over the past year or so in an effort to tame spiraling inflation — moves that have pushed stocks and cryptocurrencies sharply lower in 2022.
The hope now is that the central bank will lower interest rates, taking some of the pressure off risky assets.
Aiyar warned that this negative news or more negative news in crypto could cause the Bitcoin price to drop below $17,000, paving the way for additional declines and a potential drop for the digital asset in the $12,000-$14,000 range.
Bitcoin is down about 74% from its November 2021 high of $68,990. Last year, nearly $1.4 trillion was wiped out of the cryptocurrency market, as traders dumped risky assets such as technology and growth stocks.
Bitcoin and the broader cryptocurrency market also fell, indicating an increase in correlation with major stock benchmarks such as the Nasdaq Composite.
This decline was also caused by crypto-specific issues, including the collapse of projects and companies such as FTX and Terra.
Other altcoins supported Bitcoin's price rally on Thursday. Ether, the second largest coin, rose 5% to $1,401.18, while BNB token from Binance rose 3% to $285.37.
In turn, Binance CEO Changpeng Zhao said that the world's largest crypto exchange plans to increase employment by 15% to 30% in 2023, in stark contrast to other exchanges that have cut jobs.
