Bitcoin’s recent 20% pump from a price of $16,000 to $21,425 signifies that investors are, once again, renewing their interest and confidence in cryptocurrencies, and comes after the latest inflation data showed a fall of 0.1% in the consumer price index during December 2022.
According to the CEO of the Bitcoins-rewards app Lolli Alex Adelman, the cryptocurrency is about to see better days in the coming weeks and months.
“This new downward trend “for inflation suggests that FED may ease off of increased interest rates and loosen monetary policy in the coming months, which will continue to boost investor confidence and interest in Bitcoin,” he said.
Bitcoin’s recent sustained price rally, which started on the 8th of this month and touched a 4-month high of $21,425 is far from stalling. Before then, the cryptocurrency industry had a tough 2022, with the price of one Bitcoin falling to as low as $16,291 in November 2022. The collapse of FTX increased FED interest rates, and sustained inflation worsened crypto markets as investors stayed away.
Adelman said last week’s rally also signifies that the markets were recovering from the anxieties caused by the FTX collapse in which thousands of investors lost their money.
“We are likely to see Bitcoin continue to trade higher in the first part of 2023, particularly as the FTX debacle has highlighted the fundamental differences between Bitcoin and cryptocurrencies that are not secure stores of value,” he said. “The adoption of Bitcoin by leading firms like Blackrock that we saw in 2022 showed us that mainstream interest in Bitcoin is here to stay. As Bitcoin’s increased price holds, we will see new levels of adoption among retail and institutional investors this year.
He is optimistic that Bitcoin will remain strong moving into next month as more investors turn to it as a more secure and digital-age-relevant store of value.
However, many other experts have expressed an opposing view that the price rally could only be short-lived. CakeDEFI CEO Dr Julian Hosp, for instance, said last week that there currently is a lack of substance for a real uptrend in crypto prices.
Hosp said the current crypto price uptrend may only be a result of short-term factors and is characterized by, among others, thin trading volumes, many bankrupt trading desks, market manipulation by some crypto firms, market hopium, pent-up liquidity from holidays, and short-selling, which could pull down the prices in due course.