Bitcoin Erases Entire FTX-Related Decline in Latest Surge
Wednesday morning gains for the crypto came after soft U.S. economic numbers suggested the possibility for easier monetary policy.
Bitcoin (BTC) has risen to $21,550 early Wednesday, surpassing the level at which it stood on Nov. 5 just prior to the collapse of crypto exchange FTX. According to CoinDesk data, the price of bitcoin is now at its highest since mid-September.
Behind today's advance were this morning's larger than expected decline in the producer price index (PPI) for December combined with a bigger than forecast drop in December retail sales.
The PPI fell 0.5% in December, bringing the year-over-year rate down to 6.2% versus 7.3% previously. Market expectations had been for just 0.1% dip in December and a year-over-pace of 6.8%. The core PPI for December fell 0.1%, in line with forecasts, but the year-over-year rate fell to 5.5% versus expectations for 5.7%.
December retail sales fell 1.1% versus forecasts for just a 0.8% decline. Combined with a drop of 1% in November, this marks the first back-to-back 1%+ declines in monthly retail sales since the pandemic panic.
A check of traditional markets finds the 10-year U.S. Treasury yield down a whopping 16 basis points to 3.39%, its lowest since mid-September, and well below the current Fed Funds rate target of 4.25%-4.5%. This sort of "inversion" has typically been an excellent forecaster of a recession, or at least a sizable economic slowdown. Should that come to pass, it would surely mean easier monetary policy than currently forecast, a possible boon to risk assets, including bitcoin.
Trading in the low-$21,000 area in early November 2022, bitcoin had plunged nearly all the way down to $15,000 later that month in wake of the FTX bankruptcy. The crypto then remained stuck close to $16,500 for several weeks before embarking on this current rally in early 2023.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.