Monday’s trading session saw the value of Bitcoin (BTC-USD) skyrocket, increasing above $21,000 and indicating a 24% rise from the $16,000 low earlier in the year.
The world’s largest digital asset by market capitalization has now reached a market cap of $1.02 trillion (£980 billion), with Ethereum (ETH-USD) and Solana (SOLUSD) both experiencing significant gains over the past week.
Check: Current cryptocurrency prices
The cryptocurrency sector has been reinvigorated by investor confidence in the US economy, as the Federal Reserve has been successfully able to contain inflation without triggering a recession.
Fears of liquidity depletion, leading to economic stagnation and shrinking output, were raised due to the consecutive rate hikes by the central bank. However, all indicators now point to a reversal of this trend, as US consumer prices have only risen 6.5% in the last year. Compared to December of the previous year, this marks a significant decrease.
Read more: How Crypto Fell To Earth In 2022: Eight Charts That Tell The Story Of A Cruel Accident
Crypto market participants anticipate that the Federal Reserve will go easy on monetary policies in the upcoming months, potentially reducing the rate hikes and ending the money supply reductions.
Despite the slowing of the price increases, inflation still remains close to a 40-year record high, as the World Bank has expressed its pessimism regarding the global monetary policy tightening.
In a report published last week, the World Bank noted: “While this tightening has been necessary for price stability, it has contributed to a significant worsening of global financial conditions, which is putting a substantial drag on activity.”
