Africa-Press – Lesotho. Cryptocurrencies enjoyed an upward trend as the US inflation data came in below expectations, while the Fed’s likelihood to cut rates in September increased risk appetite.
The US Consumer Price Index (CPI) rose 2.7% year-on-year in July, while the labor market data came in negative last week.
The Fed is expected to cut its rates by 25 basis points in September with a 96% likelihood, according to money market estimates, while Treasury Secretary Scott Bessent suggests that the Fed should consider a 50-basis-point cut.
The potential rate cuts are expected to lead to some type of expansion in the US economy, pushing up the otherwise risky crypto assets.
Bitcoin reached a record high of $124,000, and Ethereum enjoyed a near 10% hike to above $4,700, while some altcoins rose as high as 20%, and the total market value of cryptocurrencies rose to over $4 trillion.
Bora Erdamar, an economics researcher at Istanbul-based Bahcesehir University, told Anadolu that cryptocurrencies are influenced by macroeconomic developments, so the rising expectations of a rate cut due to inflation pushed up prices.
“It is a well-known fact that the Trump family and many people in his Cabinet are crypto investors – some even have companies in the sector – so the successive policies implemented to support the development of crypto markets and the support for further growth of cryptocurrencies are on the rise,” he said.
Erdamar noted that Ethereum gained around 50% in July. “Both Ethereum and Bitcoin reached their highest prices, led by purchases by US firms and pro-crypto regulations, while the rate cut estimates and new ETF approvals for altcoins will also help investors determine the price direction,” he added.
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