Bitcoin (BTC), the largest cryptocurrency by market capitalization, reached the psychologically important $20,000 mark on Tuesday, and it has since held steady above the market. The price performance follows investor anticipation of slow-paced monetary tightening.

Price updates

  • It currently trades around the $20,100 mark, approximately a 1% increase over the last 24 hours. BTC is up nearly 8% over the past week.
  • Ethereum (ETH) rose as high as $1,365 over the past day but has shed those gains. The crypto currently trades at roughly the $1,346 mark, nearly the same price as 24 hours ago.
  • Ether is up roughly 5.7% in the last seven days.

Note: all prices references are as of writing

Driving the prices

  • Earlier in 2022, the crypto market crashed alongside developed countries’ capital markets as rising inflation triggered fears of a global recession.
  • Central banks of the largest economies — the United States Federal Reserve, for example — started raising interest rates to arrest the inflationary trend.
  • Investors responded by withdrawing capital from risky assets such as crypto and stocks in search of safer options like government-issued bonds. The mass exit of risky investments was what crashed the crypto market.
  • Crypto Africa has previously published a brief guide that simplifies the relationship between cryptocurrency prices, inflation and interest rates.
  • The slight rebound over the past week could signify that investors expect the central banks to decelerate monetary tightening via interest rate increases.
  • A United Nations agency on Monday warned that central banks could trigger a global recession worse than 2007 if they embark on aggressive monetary tightening.

What does this mean for bitcoin and other cryptocurrencies?

  • The crypto and stock markets will likely benefit if apex banks pace out interest rate hikes. Riskier assets tend to be attractive in low-interest rate environments.
  • On-chain analytics firm Glassnode noted in a recent newsletter that the current stability in bitcoin price is rare, “with semblance to both pre-crash November 2018, but equally to pre-rally March 2019.”

Other crypto price updates

  • Most of the other high-volume crypto assets have also edged slightly higher in the last 24 hours. Some of the best performers include:
  • Ripple’s XRP is up roughly 3.5% in the last 24 hours and 14.3% over the previous seven days.
  • Binance’s BNB coin is up roughly 0.5% over the past day and 8.5% over the past week.
  • Polygon’s MATIC is up approximately 0.6% in the last 24 hours and 15.6% over the past week.