Crypto Market Boom: Record Highs Fueled by Positive Jobs Data and Rising Institutional Interest
Summary:
The crypto market experienced a surge as leading cryptocurrencies like Bitcoin, Solana, Cardano, and Chainlink rallied, pushing the total market cap to a 2022 high of $1.59 trillion on Dec. 8th. Analysts attribute the spike to positive U.S jobs data, growing institutional interest, particularly in Ether, and an increase in total value locked (TVL) in DeFi platforms. Although potential risks still exist, the rising interest and improved trading volumes hint at an end to the bear market.
A notable increase has been witnessed in the crypto market as Bitcoin (BTC), Solana (SOL), Cardano (ADA), Chainlink (LINK) and various altcoins exhibited a significant uptick, leading to the overall market cap reaching the highest point for the year of $1.59 trillion on Dec. 8th. To understand this rise, we will consider three key factors.
The hike in crypto prices resonates with the recent employment data issued by the U.S. Bureau of Labor Statistics. The report highlighted substantial employment, with an unemployment rate of 0.2% lower than the anticipated 3.9%. The overwhelmingly positive data have prompted analysts to revise their predictions regarding interest rate reductions. It was projected that interest rate cuts would commence from May 2024, instead of March 2024, in the wake of the jobs report.
Austin Alexander, co-founder of LayerTwo Labs, commented that the prevailing uncertainty is potentially having an encouraging effect on the crypto market. He stated that Bitcoin is emerging as a reliable alternative asset amidst the increasing geopolitical uncertainties and massive debts incurred by developed economies.
The increased confidence in the crypto market is evident in the Bitcoin Fear and Greed Index, reflecting a 'greed' upswing of 6 points, reaching a monthly peak.
The first apparent interest in Ethereum beyond Bitcoin emerged when BlackRock revealed plans for a spot Ether exchange-traded fund (ETF) on Nov. 9. Following this confirmation, Ether experienced a 12.2% jump. During the first quarter of 2024, amidst the anticipated U.S recession and spot ETF approval, Ether is expected to attract $2.4 billion. The growing institutional investor interest is positively influencing the overall market.
Over the past ten weeks, the crypto market noted an influx of $1.76 billion, the highest since October 2021. Apart from Bitcoin and Ether, Solana also reported an inflow of $143 million from institutional investors.
The upbeat sentiment witnessed in the crypto market has permeated across the ecosystem. Bitcoin and altcoin traded at a value of $44.1 billion on Nov. 9. Though the trading volume for December peaked at $37.6 billion on Dec. 6, it remains higher than the September levels.
Moreover, the total value locked (TVL) in DeFi platforms reached a zenith since June 3. The TVL showing a 3.53% increase over a 24-hour period.
While potential risks might affect Bitcoin and altcoins, the heightened institutional interest and increased trading volumes suggest that the bear market streak may have concluded.
Published At
12/8/2023 11:10:55 PM
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