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Bitcoin jumps above $18,000 to highest level in a month on cooling U.S. inflation
The world’s largest digital currency climbed above $18,000 for the first time since Dec. 14, increasing in value by about 5% in the last 24 hours
on Thursday surged to its highest price in nearly a month, as traders bet on a U.S. inflation cooldown and digested news that lawyers for defunct crypto exchange FTX have found billions of dollars worth of assets.
The world’s largest digital currency climbed above $18,000 for the first time since Dec. 14, increasing in value by about 4% in the last 24 hours. Bitcoin was last trading at $18,232.36, according to CoinMetrics.
On Wednesday, attorneys for collapsed crypto exchange FTX said they had found around $5 billion in “liquid” assets, including cash and digital assets. The recovery will be a welcome boon to FTX customers after the crypto exchange imploded in November.
FTX lawyers nevertheless warned the $5 billion cache was so high that selling the assets could lead to significant downside pressure on the market, driving down their value.
U.S. inflation data out Thursday showed a modest retreat. The consumer price index decreased 0.1% in December on a monthly basis, in line with Dow Jones estimates.
Prices still increased 6.5% year-over-year, however. This was down from a 7.1% jump in November and well off a 9.1% peak rate in June. Investors hope the decline may put pressure on the U.S. Federal Reserve to reverse interest rate increases.
The Fed and other central banks have been raising interest rates over the past year or so in an effort to tame soaring inflation, in moves that forced stocks and cryptocurrencies sharply lower in 2022.
The hope now is that the U.S. central bank will cut rates, taking some pressure off risk assets.
Bitcoin is down about 74% from its November 2021 all-time high of $68,990. Last year, nearly $1.4 trillion of value was wiped off the cryptocurrency market, as traders dumped risky assets like technology and growth stocks.
Bitcoin and the broader digital currency market also slumped, suggesting increasing correlation with major stock benchmarks like the Nasdaq Composite.
The plunge was also caused by crypto-specific issues, including the collapses of projects and companies like FTX and Terra.
Bitcoin has however started 2023 on positive footing, with its price rising steadily over the last 13 days.