Inflation shock not enough to derail Bitcoin’s rise, say economists
Bitcoin traded higher on Wednesday, rising by 0.74 percent to $32,817.67 at 5 p.m. Riyadh time. Ether, the second mosttraded cryptocurrency, traded at $2,006.76, up 1.21 percent, according to data from CoinDesk.
Bitcoin soared on Wednesday after a steady decline over the past two days. Investors see Bitcoin as a potential hedge against inflation and some economists agreed with US Fed Chairman Jerome Powell that the pace of inflation still appears to be “transitory.”
“Fed officials are still telling everyone that inflation is transitory, while they pour an unjustifiable $120 billion into the market each month,” Mati Greenspan, founder of the cryptocurrency analysis firm Quantum Economics, wrote on Tuesday.
Edward Moya, a senior market analyst for the brokerage Oanda, said: “This inflation shock might not be a strong enough catalyst to break Bitcoin’s recent trading range,” CoinDesk reported.
The Australian Financial Review reported on Wednesday that Australians will soon be able to spend cryptocurrency via points of sale, with the issuance of a new physical debit card. Global payments giant Visa has approved local Australian startup CryptoSpend to begin issuing debit cards for the startup’s users.
Those using the CryptoSpend app can then pay using their Bitcoin and other supported crypto at retail stores and hospitality venues. Instead of needing to convert from crypto to fiat, like some other offerings on the market, users of CryptoSpend’s app can make direct purchases, CoinDesk reported.
Meanwhile, the European Central Bank (ECB) announced on Wednesday that it would start the investigation phase of a eurozone central bank digital currency, which will last 24 months. A digital euro would be a means to complement cash, not replace it, the ECB has stressed. Research by the bank last year highlighted a drop in the usage of cash since 2019, with the pandemic attributing to an acceleration in the long-term decline, according to the website Bitcoin News.
Elsewhere, the Ethereum blockchain has undergone explosive growth over the past 12 months, cementing its place as the leading network for decentralized finance.
While Ethereum’s growth is positive overall, it has resulted in high fees and slow transaction speeds. Numio has developed a mobile application that removes these limitations by leveraging Ethereum’s Layer 2. This integration means that transactions will be instant and about 100 times less expensive than standard Ethereum.