Bitcoin, Ether, and other cryptocurrencies rose on Friday, boosted by inflation statistics and a successful update to the Ethereum blockchain network with Shanghai upgrade Ethereum.
Bitcoin’s price had increased 2% in the previous 24 hours to $30,750, the highest level for the largest digital asset since last June when the crypto selloff intensified into a harsh bear market of multi-year lows. Bitcoin has gained more than 80% this year, breaking above the psychologically critical $30,000 barrier for the first time in ten months earlier this week, sparking talk of a new bull market.
Also, cryptos remain subject to macroeconomic influences, with the latest run upward following Thursday’s producer-price index inflation report, which also saw a rise in stocks with the Dow Jones Industrial Average and S&P 500 with Shanghai upgrade Ethereum. More evidence of decreasing inflation has increased anticipation that the Federal Reserve would soon become more flexible in its monetary policy.
The central bank rapidly boosted interest rates during the last year in an attempt to limit decades-high price increases — the major driver of last year’s falls in stocks and cryptos since the demand for riskier assets is reduced when rates rise. Bitcoin’s gain this year has come amid favorable signals of inflation and financial sector stress, all of which have fueled optimism that the Fed’s most recent rate hikes are ending and that the Fed may soon contemplate reducing rates.
A significant update to the Ethereum blockchain network known as “Shanghai” also boosts digital assets, propelling Ether prices up 6% to nearly $2,100 — the highest level since May 2022 — and fueling increases in altcoins or lesser cryptos.
In the nutshell, Shanghai upgrade Ethereum has transitioned to “proof-of-stake,” in which the network is safeguarded, and transactions are processed by Ether holders who temporarily lock up or “stake” their tokens to earn interest. The successful upgrade did not result in selling pressure, as some had predicted, and because it is expected to make staking more popular, boosting prices has spurred a rise.
Cardano gained 7%, and Polygon gained 4% among cryptocurrencies. Memecoins were also on the rise, with Dogecoin up 7% and Shiba Inu up 2%.