Bitcoin briefly topped the $22,000 mark this week, continuing to rise ahead of the US inflation data and Ethereum network “merger”.
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On Tuesday, the CPI report for August will be released, which will allow investors to understand in which direction inflation is moving and try to predict the future actions of the US Federal Reserve System (Fed) on interest rates.
Previous rate hikes by the Fed, which is trying to curb inflation, hit the stock market. In turn, the cryptocurrency, which belongs to the category of risky assets, has lost almost $2 trillion in capitalization since the November high. Bitcoin has lost more than 50% in price since the beginning of the year.
The “merger” of the Ethereum network, which means the transition of the Ethereum blockchain from the Proof-of-Work model to Proof-of-Stake, will significantly reduce the amount of energy spent on its operation. Ethereum supporters hope this will provide an opportunity to expand the cryptocurrency’s adoption, with experts warning that the “merger” will not necessarily speed up the Ethereum network and is unlikely to reduce the fees associated with transactions.
Against the backdrop of expectations, Ethereum, which reached an annual minimum in mid-June, was far ahead of bitcoin in terms of growth. Since June 19, it has increased by more than 90%, while Bitcoin has risen by regarding 20%.
However, the growth of cryptocurrencies may soon end, as next week the Fed is expected to raise interest rates once more, and this will entail a reduction in the market.
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