Your capital is at risk when you invest. Never risk more than you can afford to lose. Financial products are complex instruments and come with a high risk of losing money.

Bitcoin Jumps 2% to $24,000 Up 20% Over Past Week

July 20th, 2022 -

About 3 Mins
Dotted Circle
Dotted Circle Alt2x

Ticker Symbol: BTC, ETH

The Bitcoin/USD exchange rate rose 2% in the morning trading session to take the cryptocurrency above the $24,000 level. Ethereum also rose 2% to last exchange hands at $1,600. Both cryptocurrencies have surged from a year-to-date bottom hit earlier in the year. Bitcoin prices are up 20%, while Ethereum prices are up 50% in the last seven straight days of price rises.  

The gains come ahead of Ethereum’s approaching switch from a proof-of-work system to a proof-of-stake system, known in the industry as “The Merge”. The upgrade has recently been rumored to go live soon. The switch would reduce the energy consumption required to mine the currency by close to 99.95%. Experts and developers in the digital currency space have described the event as one of the most significant upgrades in the history of the nascent asset class.

Despite the recent bounce, Bitcoin is still down almost 50% on a year-to-date basis, far greater than the correction in the Nasdaq 100 Index, which is down roughly half that at 25%. Surging inflation has forced the Federal Reserve to raise rates and withdraw liquidity from the financial system, pushing high-risk assets such as growth-oriented technology shares and cryptocurrencies into a bear market, which is officially defined as a slide of 20% or more from recent peaks.

Furthermore, the war between Ukraine and Russia could push the global economy towards stagflation, which is the phenomenon of muted GDP growth combined with soaring inflation. In such an environment, investments that do not generate a cash yield suffer the most from deteriorating investor sentiment. The sharp drop in cryptocurrency prices and souring of investor sentiment has been described as the “Crypto Winter”.

Increased regulatory scrutiny has also impacted risk appetite. The U.S. SEC has recently proposed changes to the supervisory regime of crypto assets such as stable coins, decentralized finance platforms, and currencies. Cryptocurrencies utilizing the blockchain have also not gained widespread adoption for payments, with Bitcoin and Ethereum accounting for fewer than 0.1% of all transactions in the U.S.

The upgrade to the Ethereum system however could continue to boost prices in the short term. Other cryptocurrencies such as Cardano, Polkadot, and Binance Coin are also gaining, and the aggregate crypto market capitalization returned to above $1 trillion for the first time in six weeks. Crypto-oriented companies are on a tear recently, with firms such as Coinbase, Core Scientific, MicroStrategy, and Marathon Digital all rebounding handsomely.

This content is provided for general information purposes only and is not to be taken as investment advice nor as a recommendation for any security, investment strategy or investment account.

This content is provided for general information purposes only and is not to be taken as investment advice nor as a recommendation for any security, investment strategy or investment account.

Read more latest market news

Sharpen your trading and investing skills with our regular deep dives into global financial markets, trends, insights and strategies.

Palantir Has Potential Said One Analyst

Palantir Technologies, a prominent data-analytics firm primarily serving the U.S. government, has significant growth potential according to Wedbush analysts led...

July 18th, 2024 -

About 2 Mins

Nvidia Stock Recovers. All Eyes on Big Tech This Week

Nvidia’s stock saw a positive uptick on Monday after experiencing a sharp decline last week. The company, known for its...

April 22nd, 2024 -

About 2 Mins

Nvidia is Edging Closer to Apple And The Run Isn’t Over Yet

Nvidia’s stock has been on the rise, marking a sixth consecutive day of gains. The company has surpassed Saudi Aramco...

March 7th, 2024 -

About 2 Mins

Sign up for a free demo

Select a platform

Sign up for a free demo

Please confirm that you are over 18 years old to continue

Temporary Slide Menu