The market is showing signs of a potential bull run. Although the global market cap of cryptocurrencies has seen a slight dip, Bitcoin (BTC) and Ethereum (ETH) have 20% gains. They still held strong at around $21,000 and $1,500 respectively.
But what’s driving this upward trend in crypto prices? Here are a few key factors to keep in mind:
🔸 Softening monetary policy: With the Consumer Price Index dropping 0.1% month-on-month in December, traders are hopeful that the Federal Reserve might reverse or soften its rate hike plan. This could slow the pace of rate hikes and support digital assets.
🔸 “Halving” in 2024: The “halving” of Bitcoin, or lowering of bitcoin rewards to miners by half, is expected to occur between March and May of 2024. Some investors believe this will increase the price of bitcoin by restricting supply.
🔸 Weaker US Dollar: The US dollar has dropped to a seven-month low, which is helping digital assets like Bitcoin and Ethereum gain footing.
🔸 Improving US inflation statistics and forecasts that the global recession will end in 2022 are also contributing factors.