The crypto market held onto its gains Friday after rising sharply Thursday following the cooler CPI report.
Bitcoin and Ether retained their Thursday gains on Friday, taking the global crypto market cap to its highest level since the FTX collapse. The rally comes after new CPI data that showed inflation fell to 6.5% in December from 7.1% a month earlier.
Global Crypto Market Cap Up at the Highest Level since FTX Crash
Bitcoin (BTC) continues to hover around the $19,000 level after breaking through it recently. The world’s second-largest cryptocurrency, Ether (ETH), also held onto its gains after the global crypto market rose to its highest level since November. The two cryptocurrencies are currently trading at $18,855 and $1,404.70, respectively.
Altcoins like Solana (ADA) and Dogecoin (DOGE) are also in the green, up 0.75% and 0.37%, respectively. Conversely, Cardano (ADA) and Binance Coin (BNB) are slightly down in the past 24 hours. However, the two coins notched significant gains in the past week, up more than 21% and 11%.
The latest crypto rally boosted the global crypto market cap to $909.58 billion, up from $851 billion last week. This is the highest level since FTX’s collapse at the start of November.
Meanwhile, crypto stocks saw a mixed performance in the past 24 hours. Coinbase (NASDAQ:COIN), the world’s second-biggest crypto exchange, is down almost 2.9% in premarket trading, while Silvergate Capital's (NYSE:SI shares rose 1.8%. The company’s stock plunged over 40% last week after the bank sold assets at a significant loss to cover roughly $8.1 billion in withdrawals. Shares of Michael Saylor’s MicroStrategy were also down over 2% in pre-open Friday.
Cooling Inflation the Likely Reason Behind Crypto Rally
The crypto market leap comes on the heels of the latest CPI print, which showed that the annual inflation rate in the US fell for the sixth consecutive month in December. The reading was in line with economists’ estimates.
Cooler inflation suggests that the Federal Reserve’s series of jumbo interest rate hikes are bearing fruit. However, it remains unclear whether the US central bank plans to significantly slow the rate increases in the near term as it attempts to bring inflation back to 2%.
Meanwhile, the robust labor market continues to bolster the US economy. The unemployment rate fell to a 53-year low last week of 3.5%, though some companies still find it challenging to hire new employees.