In the second week of August, Bitcoin drew an upward-sloping graph. After a brief pause ahead of the release of the US Consumer Price Index (CPI) in July, the Bitcoin price continued its upward trend as the CPI growth rate slowed. Market expectations rose as inflation slowed. As a result, the prices of major virtual assets such as Ethereum and Ripple also rose.
Bitcoin cheers for signs of slowing inflation
According to Upbit, a virtual asset exchange, as of 9 am on the 13th, bitcoin was traded at 32,359,000 won, up 5.23% from the same time last week. Earlier this week, Bitcoin faltered ahead of the July CPI announcement. This is because the level of interest rate hikes will be decided at the September Federal Open Market Committee (FOMC) meeting depending on the CPI growth rate. However, the price of Bitcoin moved sideways, keeping the psychological barrier of 30 million won.
However, market expectations for signs of slowing inflation have grown. The U.S. Federal Reserve announced on the 8th (local time) that the expected inflation rate for the next one year was 6.2% in its July Consumer Prospect Survey. This is slightly lower than the previous month (6.8%). The expected inflation forecast for the next three years was also found to be 3.2%, 0.4% lower than the 3.6% in July.
However, the market is predicting that this upward trend will not lead to a bull market. Galaxy Digital CEO Mike Novogratz said, “It will be difficult for Bitcoin to break through the $30,000 mark for the time being. is difficult to come by,” he analyzed.
However, on the 10th (local time), the US Department of Labor announced that the CPI growth rate in July rose 8.5% from the same month of the previous year, and Bitcoin began to move upward. The rate of increase slowed significantly compared to last June (9.1%), which was the highest in 41 years since 1981. This was lower than the 8.7% expected by the market. In addition, the US producer price index (PPI) also fell below the market forecast, showing that Bitcoin’s upward trend is gaining momentum. The increase was significantly slower than in June (9.1%), which was the highest in 41 years since 1981.
In the market, the direction of the US Federal Reserve (Fed) to choose a ‘big step (a 0.5% increase in the benchmark interest rate)’ instead of a ‘giant step (a 0.75% increase in the key interest rate)’ at the Federal Open Market Committee (FOMC) scheduled for September next month. It predicts the possibility of turning to As a result, investor sentiment is showing signs of breaking out of the fear stage. The self-estimated ‘fear and greed index’ of Alternative, a virtual asset data provider, recorded 46, up 4 points from the previous day. The index closer to 0 indicates extreme fear in the market, and closer to 100 indicates extreme optimism.
Ethereum with rising expectations for PoS transition
Ethereum was traded at 2595,000 won per unit, up 13.36% from the same time last week. Ethereum is continuing its upward trend this month due to expectations for a proof-of-stake (PoS) transition. Switching from proof-of-work (PoW) with low transaction speed and high fees to PoS will not only improve transaction speed and fees, but also dramatically reduce power consumption.
Ethereum founder Vitalik Buterin said at the domestic blockchain conference ‘Biddle Asia’ on the 4th that Ethereum will be switched to PoS in mid-to-late September. In addition, the PoS conversion of the Ethereum testnet Goerli was completed on the 11th. Goli is the last testnet among the three networks, Sefolia, Ropsten, and Goli, that are prior to upgrade for the Ethereum mainnet merge. In the Golli testnet, after the final difficulty (TTD) exceeded 10,790,000, it was switched to a PoS network around 10:45 Korean time.
Then, on the 12th (local time), Vitalik Buterin tweeted, “The exact timing of the Ethereum mainnet PoS transition will be determined depending on the hash rate, but it is expected to occur around September 15.” He added, “The terminal’s total difficulty is set to 58750000000000000000000. This means that a proof-of-work (PoW) based Ethereum network can only mine a certain amount of hash.”
However, according to foreign media, Glass Node analyst, a virtual asset data analysis company, said, “Until September, when PoS conversion is expected, call option orders for betting on the rise of Ethereum poured in, but there is little demand for call options during the month after September. It seems that they are hedging the risk of falling prices in anticipation of the ‘selling on the news’ situation.” Kevin Zhou, a virtual asset hedge fund Galois Capital, said, “It is very risky not to keep in mind the consequences of the merge not going smoothly. We recommend strategies such as selling).”
Ripple walks alone
Bitcoin and Ethereum have drawn an upward-sloping graph this week, but Ripple seems to have stood still. Ripple was traded at 504 won per unit, up 1.4% from the same time last week. As the sluggish litigation with the US Securities and Exchange Commission (SEC) continues, it is failing to respond to the positive news that inflation is slowing. Rather, it seems that the litigation conflict is intensifying.
On the 8th (local time), US attorney John Deaton representing the Ripple community revealed that the number of XRP holders participating in a class action lawsuit against the US SEC has surpassed 70,000. According to him, Ripple holders from 141 countries, including all U.S. states, participated in the lawsuit. Deaton said that in January 2021, there were only seven class action participants, stressing that Seungri will be on XRP’s side.
In addition, according to foreign media on the 10th (local time), in a lawsuit between Ripple and the SEC, Ripple requested the judge in charge to dismiss the SEC’s application to disclose evidence of William Hinman’s speech. Previously, the magistrate Sarah Netburn in charge of the case had ordered the SEC to file relevant materials three times in January, April, and July, but the SEC asserts privileges in the hearing process (DPP) and does not disclose relevant e-mail materials. requested
In response, Ripple pointed out, “The SEC has ‘misunderstood’ the ruling that it allows objections to the court order. Their claim that there is an error in the court’s decision to disclose evidence is groundless.” Meanwhile, Hinman’s speech is evidence that can play a decisive role in the ‘unregistered securities sale’ lawsuit between Ripple and the SEC. known to be
In addition, the virtual asset ‘Clay’ issued by Ground X, a subsidiary of Kakao, was traded at 410 won per piece, up 4.32% from the same time last week. In addition, the virtual asset ‘Link’ issued by Line, an affiliate of Naver, was traded at $48 per piece, up 9.09% from the same time last week.
Reporter Lee Seong-woo email@example.com