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Bitcoins rose to its highest price in nearly a month on Thursday as investors bet on a fall in U.S. inflation and digested news that lawyers for the defunct cryptocurrency exchange FTX found assets price billions of dollars.
The world’s largest digital currency has surpassed $18,000 for the primary time since December 14, increasing its value by around 4% within the last 24 hours. In keeping with CoinMetrics, Bitcoin was recently traded at $18,232.36.
On Wednesday, lawyers for collapsed cryptocurrency exchange FTX said they’d found about $5 billion in “liquid” assets, including money and digital assets. The recovery will likely be a welcome boon for FTX customers after the cryptocurrency exchange imploded in November.
Nonetheless, lawyers for FTX warned that the $5 billion buffer is so high that selling the assets could lead on to significant downward pressure available on the market, driving down their value.
Thursday’s US inflation data showed a slight decline. The patron price index fell by 0.1% m/m in December, based on Dow Jones estimates.
Nonetheless, prices still increased by 6.5% year-on-year. That is down from a jump of seven.1% in November and well below the height of 9.1% in June. Investors are hoping the decline could put pressure on the US Federal Reserve to back off from raising rates of interest.
The Fed and other central banks have been raising rates of interest over the past 12 months in an effort to rein in soaring inflation, in moves which have forced stock and cryptocurrency prices to plummet in 2022.
There may be now hope that the US central bank will cut rates of interest, relieving assets in danger.
Bitcoin is down around 74% from its November 2021 high of $68,990. Nearly $1.4 trillion in value vanished from the cryptocurrency market last 12 months as traders abandoned dangerous assets like tech and growth stocks.
Bitcoin and the broader digital currency market also fell, suggesting an increasing correlation with major stock indexes such as the Nasdaq Composite.
The decline was also because of crypto-related issues, including the collapse of projects and corporations like FTX and Terra.
Nonetheless, Bitcoin began 2023 on a positive note, with its price steadily rising during the last 12 days.
“Bitcoin has been in a downtrend for greater than a 12 months, which is a regular cryptocurrency bear market,” said Vijay Ayyar, vice chairman of cryptocurrency, Bitcoin.
“We have had a whole lot of negative developments during the last 12 months and should you take a look at the price response to those developments, it’s generally been falling less and fewer – this means the market is taking the news quite well, the selling pressure is being absorbed and so we’re moving into accumulation stage,” added Ayyar.
“It could also mean that the market thinks the worst for crypto is behind us and probably the most negative news is already on the rise.”
Other digital currencies were boosted by the spike in bitcoin prices on Thursday. Ether, the second-largest coin, surged nearly 5% to $1,397.78, while Binance’s BNB token surged 3% to $283.
Changpeng Zhao, CEO of Binance, told CNBC on Wednesday that the exchange plans to extend headcount by 15% to 30% in 2023, in stark contrast to other exchanges which have cut jobs.
Binance, which previously pledged $1 billion to a fund to support the industry after FTX’s collapse, has itself been tormented by concerns in regards to the robustness of its reserves. The auditor working on the so-called proof of the corporate’s reserves, Mazars halted all work with crypto firms in December.
Binance says it has good enough assets to cover its liabilities.