The digital currency ecosystem is booming today, as evidenced by the rise in the combined market capitalization of crypto-currencies, which jumped 4.52% to $1.09 trillion. Bitcoin (BTC) is leading the bullish momentum in the market today with its price up 3.49% to $23,813.69 and many altcoins are following suit.
Bitcoin has been an exceptionally positive price move since the beginning of the year. The leading crypto-currency has risen 15% in the past two weeks and more than 43% in the past month. With last year being known as the time when crypto winter was fully expressed in most risk assets like bitcoin, the coin has erased some of the losses it had accumulated during that time.
From a year-over-year loss of more than 65 percent at the end of the year, the crypto-currency is now down to 38.6 percent, according to data from Coingecko. In the wake of bitcoin’s growth, the majority of altcoins are also on the rise.
Ethereum (ETH) is changing hands at $1,670.87, up 6.07%, and Binance Coin (BNB) has reached $329.47, up 7.14% in the past 24 hours. Solana (SOL), Avalanche (AVAX) and Cardano (ADA) are also up, marking an overall push for crypto-currencies.
The positive attitude toward the growth of crypto-currencies has been highlighted by a number of leading regulators, including the Reserve Bank of India (RBI). RBI officials have called for global coordination of crypto-currency regulation to achieve the desired outcome.
“As for the Indian economy, whose budget was presented today, Finance Minister Nirmala Sitharaman made no mention of crypto, virtual or digital assets, blockchain or central bank digital currencies“, said ZebPay Trade Desk. “India has been keeping a cool head on a crypto bill since early last year, saying that crypto regulation cannot succeed without global coordination, which is a priority with its power to lead the G-20.“
The price of bitcoin and altcoins and the impact of falling interest rates
The growth of bitcoin and other altcoins also stems from the dovish stance of the U.S. Federal Reserve after its two-day policy meeting on Wednesday raised interest rates by 25 basis points. This slight increase is in line with analyst expectations.
While investors are positive the Fed’s shift is a good thing for the crypto ecosystem and the broader financial ecosystem, it is necessary for market makers to be cautious about the Fed’s fight against inflation. In particular, the Fed wants past interest rate hikes to have an effect on the economy before renewing its hardline stance.
The December inflation reading came in at 6.5%, and while well below last year’s highs, it is still well above the Fed’s target of 2% to 4%. For now, the market is benefiting from the positivity in the broader financial world.