The cryptocurrency and blockchain space experienced extreme turbulence in late 2021 and early 2022. This coincided with soaring inflation rates that hit their highest levels in decades. In response, the United States Federal Reserve, the Bank of Canada (BoC), and other central banks across the developed world elected to pursue the most aggressive interest rate tightening policy since the beginning of the new Millennium. Today, I want to zero-in on the top two cryptocurrencies available on the market.
Bitcoin, the largest digital currency on the planet. The top cryptocurrency fell below the $25,000 price point in the middle of September, which had crypto bears celebrating what appeared to be a stalled summer rally. Bitcoin is now priced just under $38,000 as of close on Wednesday, November 29. The price of Bitcoin has now surged 128% so far in 2023.
Ethereum is the second-largest digital currency by market capitalization. This digital currency also enjoyed a short-lived rally during the 2023 summer season before retreating in late August and September. Fortunately, it has been able to take advantage of the broader crypto market. Ethereum was priced at $2,7621. That is its highest price since May 2022.
Some analysts and experts are of the opinion that the Federal Reserve has finished with its rate tightening cycle after several comments were made in the late fall season. Oddsmakers believe that an interest rate cut will likely arrive some time in the middle of 2024. A return to rate normalcy could be good news for cryptocurrencies, which have thrived in an environment of high liquidity in the late 2010s and early 2020s.
