Bitcoin Extends Rebound on Positive Market Sentiment
Bitcoin rose on Thursday, continuing its overnight rebound as risk appetite surged due to in-line U.S. consumer inflation data. This positive market sentiment has kept investors largely anticipating a December interest rate cut.
The world’s largest cryptocurrency has now recouped all losses from the past week and appears to have broken out of a $90,000 to $100,000 trading range seen in recent weeks. Bitcoin rose by 3.5% to $100,875.9 by 00:47 ET (05:47 GMT).
Other cryptocurrencies also saw gains, tracking Bitcoin’s movement. Most altcoins experienced stronger gains as risk appetite increased. The prospect of friendlier U.S. crypto regulations under a potential Donald Trump presidency has also contributed to the overall market positivity.
CPI Data Supports Expectations of a December Rate Cut
Investors are increasingly betting on the Federal Reserve cutting interest rates by 25 basis points next week, following the release of inflation data that was in line with expectations. While inflation remains steady, concerns about the long-term trajectory of rates persist.
However, the prospect of lower near-term rates has boosted risk appetite, leading to Wall Street indexes reaching record highs in overnight trading. Lower rates are generally favorable for speculative assets like cryptocurrencies.
Microsoft Shareholders Reject Bitcoin Investment Proposal
Shareholders of technology giant Microsoft Corporation voted against a proposal to consider adding Bitcoin to its balance sheet this week. The proposal, put forward by the National Center for Public Policy Research, suggested that Bitcoin could serve as a reliable inflation hedge for the company.
Despite this suggestion, shareholders decided against the proposal, with Microsoft’s board also advising against its approval. The company has shown a preference for less volatile assets in the past, even though it does consider crypto as a potential investment.
Comments from MSTR CEO Michael Saylor advocating for Microsoft to adopt Bitcoin failed to sway shareholders. Saylor’s strategy of investing in the cryptocurrency has seen Microstrategy’s stock surge by 450% this year, with investors treating the company as a proxy for crypto.
Altcoins Rally Alongside Bitcoin
Other cryptocurrencies have rallied in sync with Bitcoin, recovering all losses from the past week. The world’s second-largest cryptocurrency, Ethereum, rose by 6.9% to $3,911.99, while Ripple increased by 4.1% to $2.4225.
Litecoin, Cardano, and Polkadot all surged between 5% and 15%, with meme token Dogecoin adding 6.4% to its value.
Overall, the cryptocurrency market is experiencing a positive trend, with various digital assets showing significant gains.
Analysis of Market Trends
The recent upward movement in Bitcoin and other cryptocurrencies can be attributed to positive market sentiment driven by in-line U.S. consumer inflation data. Investors are anticipating a December interest rate cut, which has boosted risk appetite and led to a surge in speculative assets like cryptocurrencies.
While the rejection of a Bitcoin investment proposal by Microsoft shareholders may have dampened some enthusiasm, the overall market remains optimistic. Altcoins have rallied alongside Bitcoin, indicating a broader positive trend in the cryptocurrency market.
Investors and traders should continue to monitor market developments closely, as future regulatory decisions and macroeconomic factors could impact the trajectory of digital assets in the coming weeks.