Bitcoin remained relatively stable on Wednesday after a recent decline, as traders refrained from taking significant action ahead of the publication of key US inflation data that could influence future interest rate decisions. Writes UNN with reference to Investing.
Prices in the cryptocurrency market have suffered significant losses this week due to a decrease in risk appetite caused by geopolitical tensions in the Middle East and Asia. In addition, the markets are experiencing profit-taking after the November rally.
By 00:53 EDT (05:53 GMT), bitcoin was up 0.6%, reaching $97,483.5.
The main focus of traders was on inflation data expected later on Wednesday. These data may affect future decisions of the Federal Reserve, in particular, the expected 25 basis points rate cut at the next meeting.
However, the long-term outlook for rates remains uncertain due to signs of accelerating inflation. Donald Trump's protectionist and expansionary policies are also expected to keep inflation high, which could keep rates elevated in the long run.
High interest rates are creating difficulties for speculative assets, including cryptocurrencies, by limiting the available liquidity for investment.
On Tuesday, shares of MicroStrategy Incorporated (NASDAQ:MSTR), the largest corporate owner of bitcoin, rose amid speculation about its possible inclusion in the Nasdaq 100 index. This step could stimulate further growth in the value of the stock.
In 2024, MicroStrategy's shares increased by 450%, which is due to the company's successful investment in bitcoin. It continues to issue debt for further cryptocurrency purchases. According to Bloomberg analyst Eric Balchunas, the inclusion of the company's shares in the Nasdaq 100 could attract investments from exchange-traded funds worth at least $2.1 billion.
Among other cryptocurrencies, mixed dynamics were observed on Wednesday. Although altcoins suffered losses in previous sessions due to active profit-taking, most of them remain at higher levels compared to the beginning of the year.
Ethereum, the second-largest cryptocurrency by market capitalization, fell by 1.1% to $3,661.36. XRP stabilized at $2.3368 after recovering from a 10-day low. Solana gained 1.3%, while Cardano and Polygon were unchanged. Among the meme tokens, Dogecoin fell by 3.4%.
Recall
Last week, the world's largest cryptocurrency dropped to $94 thousand dollars amid the declaration of martial law by the South Korean president due to the threat of impeachment.
