Major cryptocurrencies have held up well and actually advanced despite hotter-than-expected US CPI data boosting Fed tightening bets.
Bitcoin is close to $20,000 and Ethereum near $1,100, even though the Fed is now seen hiking 100bps this month.
Polygon was an outperformer and last up nearly 16% in 24 hours after being selected for Disney’s 2022 Accelerator Programme.
Fed Likely to Hike Rates 100 bps in July After Hot US CPI
The headline annual rate of US inflation according to the Consumer Price Index (CPI) rose to a new four-decade high of 9.1% in June, according to data published on Wednesday. That was a 0.5% jump from May’s 8.6% (also a four-decade high), above the expected reading of 8.8% and was driven by a larger-than-expected leap in headline prices on a MoM basis of 1.3% versus an expected 1.1% rise.
While measures of core inflation were a little better, with the annual rate falling to 5.9% from 6.0% in May, that was still a fair amount above the expected reading of 5.7%. Another big jump in headline inflation is exactly what the US Federal Reserve, who has already raised interest rates by 150 bps this year, doesn’t want to see.
The latest data has naturally encouraged markets to speculate that the Fed might go with an even bigger 100 bps rate hike at its meeting later this month than the 75 bps rate hike it implemented last month. In fact, according to the CME’s Fed Watch tool which monitors US money markets, the implied probability of a 100 bps rate hike later this month is now around 75%, up from only around 7% prior to the US inflation data.
US Producer Price Inflation (PPI) data is scheduled for release later in the day, but the main event that traders will be watching is remarks from influential Fed policymaker Christopher Waller at 1500GMT. Traders want to know how the Fed has interpreted the latest inflation figures.
Though prices did take a short-lived knock in wake of the latest hotter-than-expected US inflation data, major cryptocurrencies have since recovered, with Bitcoin on Wednesday snapping a five-day losing streak. The world’s largest cryptocurrency by market capitalization was last changing hands just below $20,000, up more than 5.0% from Wednesday’s sub-$19,000 lows, with BTC/USD having found resistance at its 21-Day Moving Average around $20,400.
Recent price action suggests that Bitcoin traders have been reluctant to push the cryptocurrency below a bearish flag it has formed in recent weeks. Meanwhile, Ethereum, the world’s second-largest cryptocurrency by market cap, was trading in the $1,100 area, having bounced over 9.0% from Wednesday’s lows when it tested late-June lows around the $1,000 level. Recent price action in ETH/USD confirms that the pair has formed a $1,000-$1,280 range.
In terms of other major altcoins, Polygon is an outperformer after being selected to participate in Disney’s Accelerator Programme and was last up about 16% in the last 24 hours. The likes of BNB, XRP, ADA, SOL and DOGE were all up between 1-4% over the same time period, whilst AVAX and UNI were up about 8% and 11% respectively.
Polygon’s MATIC Surges as Project Selected for Disney’s Accelerator Program
According to a statement made by Disney on Wednesday, Polygon, an Ethereum scaling tool, has been selected as one of six companies to participate in its 2022 Accelerator program. The business development program is designed to support the growth of innovative companies, Disney says.
Disney hopes the program will spur the development of augmented reality, Non-fungible Tokens (NFTs) and artificial intelligence. According to its statement, Disney will offer each of the six companies guidance from Disney’s senior leadership team and will assign each a dedicated executive-level mentor.
The announcement sent Polygon’s native token MATIC surging. According to CoinMarketCap, it is the best performing cryptocurrency in the top 20 by market cap with gains of nearly 16% in the last 24 hours. The latest rally sent MATIC/USD to fresh highs since early June near $6.50 and convincingly above a downtrend from mid-May.
Celsius Files for Chapter 11 Bankruptcy Protections
Troubled crypto lending platform Celsius Network, which halted customer withdrawals over a month ago due to “extreme market conditions”, said on Wednesday that it had filed for Chapter 11 bankruptcy protection in the US State of New York. “Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers”, the company explained.
“Without a pause, the acceleration of withdrawals would have allowed certain customers, those who were first to act, to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery,” the company continued.
Celsius Network’s CEL token tanked as much as 58% in the hours following the announcement.
Various crypto media outlets citing blockchain data on Wednesday reported that Celsius has now finished paying off loans to Decentralised Finance (DeFi) protocols. Some crypto traders were on Wednesday watching a widening of the price discount between staked Ether to spot Ether, which widened from about 2.6% to over 4% on the day. They said this could be due to worries that Celsius is about to dump stETH holdings to raise liquidity.
$2.6M CryptoPunk Sale Indicates NFT Comeback
According to Twitter account CryptoPunks Bot, Punk 4464 was sold for 2,500 ETH on Tuesday (worth over $2.6 million at the time), marking the fifth largest sale in the CryptoPunk NFT collection’s history. Another CryptoPunk, Punk 9280, has also received a $2.6 million bid, though this hasn’t been accepted.
The notable CryptoPunk NFT deal comes amid a broad recovery in the so-called price floor of the collection (i.e. the minimum required to buy a CryptoPunk NFT). According to NFT data analytics website NFT Price Floor, the CryptoPunk price floor was around $87,000 on Thursday, up sharply from as low as the $52,000s less than one month ago.
But that still leaves it well below its around $200,000 levels in Q1 of this year. The price floor recovery in other notable NFT collections hasn’t been quite so impressive. For example, the minimum required to purchase a Bored Ape Yacht Club NFT was last around $105,000, only about $10,000 higher versus June lows.
