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Inflation and Crypto Markets

Inflation Combat Keeps Crypto Markets On Tenterhooks

By RTTNews Staff Writer | Published: 1/19/2022 9:05 AM ET

Crypto prices continue to be volatile in the backdrop of a lingering tight monetary policy regime that could reduce the appetite for risky assets like cryptocurrencies. The tension escalation in the Middle East has driven crude oil prices further up, triggering fears of fuel-fed inflation that could invite a fiercer inflation-combat and a painful monetary tightening by central banks worldwide.

Prices hitting period-highs in respect of various commodities like crude oil, iron ore, steel, palm oil, cotton, rubber, wool, heating oil, lumber. etc. and inflation touching multi-year highs in several countries like Ireland (20- year high), Germany (29-year high), U.K. (30-year high) etc. that made headlines during the past 24 hours kept the inflation narrative alive and monetary policy nervousness relevant.

The aggregate market capitalization of all cryptocurrencies spanning, coins, tokens and stablecoins is currently at $1.99 trillion, up half a percent over Tuesday’s level.

Bitcoin is currently trading at $42,261.76, 1.39 percent higher than the level a day ago. Ethereum’s current price is $3,130.98, 0.41 percent than the level a day ago.

Among the top coins (excluding stablecoins), Bitcoin (BTC), BNB (BNB), Solana (SOL), Terra (LUNA), Dogecoin (DOGE) and SHIBA INU (SHIB) are in overnight positive territory.

Ethereum (ETH), Cardano (ADA), XRP(XRP), Polkadot (DOT), Avalanche (AVAX) and Polygon (MATIC) are in overnight negative territory.

Between the 30th of December 2021, and now, aggregate crypto cryptocurrency market capitalization has fallen by almost 11 percent, from $2.23 trillion, to $1.99 trillion. The 18 percent drop in metaverse market cap, the 16 percent drop in the market capitalization of the NFTs & Collectibles category as well as the 12 percent drop in the Smart contracts category and Memes categories, far exceed the drop in aggregate market capitalization.

Web 3 category has fallen by 8 percent, whereas DeFi is dragged down by 5 percent. However, Research category has added 5 percent, closely followed by stablecoins that have increased by 3 percent.

5th ranked Cardano (ADA) which tops the best-performing Research category has gained 3 percent during the period. The 28 percent dip in the 25th ranked Algorand (ALGO), which comes next has been eclipsed by the 36 percent spike in 26th ranked “Ethereum challenger” Fantom (FTM).

Interestingly, among stablecoins, market capitalization of leader Tether (USDT) has declined around 0.11 percent during the period. Second ranked USD coin (USDC) has gained 8 percent, closely followed by Terra USD with a gain of 6 percent. DAI’s market cap swelled by almost 5 percent.

Open interest in the Bitcoin Futures contracts at Chicago Mercantile Exchange increased to 11472 on Tuesday, from the level of 11175 on Friday. Open interest in the Ether Futures contracts also increased to 3868 on Tuesday, from the level of 3632 on Friday. The extent of leverage as revealed by the open interest could be an indication of imminent volatility in the days ahead.

Meanwhile markets keenly await the Congressional hearing on Thursday on the energy impact of crypto currencies. At a time when concerns over climate and environment are on top of global conscience, crypto world would have to innovate quickly for reducing the energy burden emanating from crypto sphere.

For comments and feedback contact: editorial@rttnews.com

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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

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