The crypto market extended its gains on Friday after rising sharply on Thursday from reports of lower inflation.
Citing analysis authored by Timothy Fries of The Tokenist, Bitcoin and Ethereum held onto Thursday's gains on Friday, pushing the global crypto market cap to its highest level since the FTX bankruptcy. The rally came after new inflation data showed inflation fell to 6.5% in December from 7.1% a month earlier.
Global Crypto Market Cap Rises to Highest Level since FTX Crash
Bitcoin (BTC) continues to hover around the $19,000 level after breaking it recently. The world's second-largest cryptocurrency, Ethereum (ETH), also maintained its gains after global crypto markets rose to their highest since November. The two cryptocurrencies as of writing are trading at $18,855 and $1,404.70 respectively.
On Monday (16/01) this morning, bitcoin rose again to $21,150 and ethereum rose $1,569 according to Investing.com data at 08.49 WIB.
Altcoins such as Solana (ADA) and Dogecoin (DOGE) were also in the green, up 0.75% and 0.37%, respectively. In contrast, Cardano (ADA) and Binance Coin (BNB) have fallen slightly in the last 24 hours. However, both coins registered significant gains in the past week, up more than 21% and 11%.
The latest crypto rally increased the global crypto market cap to $909.58 billion, up from $851 billion last week. This is the highest level since the FTX collapse in early November.
Meanwhile, crypto stocks have performed mixed in the last 24 hours. Coinbase (NASDAQ:COIN), the world's second-largest crypto exchange, rallied nearly 2.9% in early trading, while Silvergate Capital (NYSE:SI) gained 1.8%. The company's shares plunged more than 40% last week after the bank selling assets at a significant loss to cover about $8.1 billion in withdrawals.Michael Saylor's MicroStrategy shares were also down more than 2% before Friday's open.
Slowing Inflation May Be The Reason Behind Crypto's Rally
The crypto market jump came after the latest CPI figures, which showed that the annual inflation rate in the US fell for the sixth straight month in December. The results were in line with economists' forecasts.
Lower inflation implies that the Federal Reserve's string of jumbo rate hikes is paying off. However, it remains unclear whether the US central bank plans to significantly slow down interest rate increases in the near term while trying to bring inflation back to 2%.
Meanwhile, a strong labor market continues to support the US economy. The unemployment rate fell to a 53-year low last week of 3.5%, although some companies are still struggling to recruit new employees.