Bitcoin, Ether crypto market gains reversed after slowing US inflation

Bitcoin rose in trading on Friday morning in Asia along with Ether and most other major tokens, reversing a three-day decline as the consumer price index (CPI) released on Thursday showed that inflation in the United States slowed in October. Leading stablecoin USDT saw a brief “de-pegging” from the US dollar as Tether, the token’s issuer, froze US$46 million of assets held by the cash FTX exchange following a law enforcement request.

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Fast facts

• Bitcoin was 8.6% higher at $17,453 in the 24 hours to 8:30 a.m. in Hong Kong, while Ether rose 15.2% to $1,288, according to CoinMarketCap.

• USDT, a stablecoin designed to maintain parity with the US dollar, fell to as low as US$0.9815 late Thursday night, according to CoinMarketCap. Blockchain data aggregator WhaleAlert indicated that Tether froze 46,360,701 USDT owned by FTX just one day after the US Securities and Exchange Commission and Department of Justice launched an investigation into FTX following the liquidity crisis.

• Polygon saw the biggest gains in the top 10 tokens by market cap, excluding stablecoins, rising 34.8% to $1.13, as a Walt Disney Co. “accelerator program” informational video was published on Friday morning to show the blockchain’s integration with the mass media company. Polygon had learned earlier this week that social media platform Instagram chose the platform to host their NFT integration.

• Solana retreated 18% to $17.30, but is still down 44.3% in the past seven days. Alameda Research, the brokerage arm of FTX International, sold stakes this week to try to stop the run of FTX’s original token FTT, and Solana made up a large portion of those holdings.

• US stocks rose on Thursday, posting their biggest one-day gains since 2020. The Nasdaq Composite Index rose 7.4%, the S&P 500 rose 5.5% and the Dow Jones Industrial Average ended 3.7% higher.

• CPI data released on Thursday showed inflation rose to 7.7% in October, up 0.4% from the same month a year ago, but lower than the 7.9% economists had forecast and the smallest monthly increase since January. Investors saw the CPI as a sign that interest rate hikes by the US Federal Reserve are slowing inflation.

• US interest rates are now at a 15-year high of 3.75% to 4% from near zero in March. The Fed has said it wants inflation back to a target of 2 percent. It was 8.2% in September.

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