Crypto market braces for inflation data
Interest rate hikes are anticipated to slow as central banks continue to war against the inflationary threat. In response, the crypto market could remain volatile with other risky assets.
Reports underlined that the U.S. will release its November inflation figures this week to decide the course of the Federal Reserve’s policy decision for the rest of 2023.
‘Super Central Bank Week’ Puts Pressure on the Crypto Market
The U.S. Federal Open Market Committee (FOMC) announced its decision to hike interest rates on December 14 with a 75% probability of doing so by 50 basis points. This comes after six significant hikes this year. At the same time, the central banks of Europe and Great Britain will also publish their interest rate decisions in the week. Therefore, “Super Central Bank Week” will begin around the world this week.
Today, the global cryptocurrency market cap slid back to $877 billion in a fall of around 2% in the last 24 hours, according to CoinGecko. At the time of press, Bitcoin was trading under $17,000 per coin, while Ethereum remained under $1,300.
All top cryptos by market cap were in the red following the opening of the new week.
Will ‘Digital Gold’ Perform in a low-Inflation Regime
In global markets, gold rates slipped on the back of the upcoming policy decision. Since gold is considered a hedge against inflation, lowering inflationary levels brings down the price of the yellow metal. Often equated with digital gold, Bitcoin is also expected to remain volatile in the transition.
Bloomberg’s senior strategist Mike McGlone recently tweeted that BTC is turning into a “high-beta version of gold.” This means that Bitcoin can outperform gold during market downturns. However, BTC can also slide more profoundly when the gold loses its shine.
And with recessionary sentiments entering 2023, McGlone anticipates gold to become a top performer.
At press time, Bitcoin’s fear and greed index reflects fear in the market.
Meanwhile, the total value locked in the decentralized finance market has also decreased in the past 24 hours. DeFiLlama noted a TVL of under $42 billion, a fall of around a percentage during the period.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.