Bitcoin, a major cryptocurrency, broke the significant $30,000 level on Tuesday for the first time in 10 months, continuing its steady gains as investors bet on the U.S. Federal Reserve’s monetary policy.
Bitcoin rose to $30,438 in Asian trade and was last up 1.96% at $30,233, having increased by almost 6% since the beginning of the month, following a 23% increase in March. An inflation report on Wednesday will help investors assess the Fed’s next move after banking sector chaos in March boosted expectations that the central bank would reduce rate hikes to ease the industry’s strain.
“The recent surge in bitcoin’s price is like a breath of fresh air after a long, cold crypto winter,” said Tim Frost, CEO of crypto yield platform Yield App.
Joseph Edwards, an investment adviser at Enigma Securities, said that “There were some expectations of a potential miss on NFP on Friday, and that’s bolstered confidence coming into” the release of U.S. consumer price index data.
Crypto investment products attracted $57 million in inflows last week, with most of the funds invested in bitcoin, according to digital asset manager CoinShares. Ether, the second-largest cryptocurrency, remained near last week’s approximately eight-month peak of $1,942.50. It was last up 1.56% to $1,915.56.
A significant upgrade to the Ethereum blockchain, called Shapella, will be released on Wednesday, enabling crypto investors to access more than $33 billion in ether currency. The software upgrade will allow market participants to redeem their “staked ether” in exchange for interest, but Bank of America strategist Alkesh Shah warns that the event could increase volatility.