BTC surged past the $61K mark during the Asia trading day and outperformed the CD20. Traders are optimistic toward TON thanks to its Telegram integration and nascent GameFi ecosystem.
Bitcoin (BTC) surged above $61,000 in early Asian trading hours Wednesday to lead gains among major tokens, reversing losses from a steep price drop earlier this month.
According to Coin Gecko data, Bitcoin rose more than 3%. Majors Ether, Solana’s SOL, Cardanol’s ADA, XRP, and BNB Chain’s BNB climbed as high as 2.8%. Major meme coins dogecoin and shiba inu were up just 1%, suggesting sentiment wasn’t with the riskier bets.
Gains in bitcoin eclipsed a 2.45% rally in the broader Coin Desk 20, a liquid index of the largest tokens by market capitalization that excludes stable coins.
Despite these modest gains,
some trading funds are still cautious ahead of a busy data week, warning of possible short-term tremors ahead that could impede the ongoing rally.
“Investors are still cautious ahead of the US CPI this week, ” QCP Capital, a crypto trading firm, commented in a Telegram broadcast. “They would want to watch the inflation numbers closely for signs on whether the Fed will cut rates by 50 or 25 bps in September. The odds are now evenly split.”
Wednesday’s recovery helped chalk up gains for traders nursing losses after a 20% market-wide drop earlier in August as the popular yen carry trade unwound. Some strategists also raise a word of caution that further losses related to the carry trade could be at hand, saying its impact is not yet fully over.
Speaking with CNBC earlier this week, Richard Kelly, head of global strategy at TD Securities, said he was “very hesitant” to call the end of the carry trade unwind.
“I’d push back on a lot of those narratives.
You don’t have any real data to price your carry trades that we know, Kelly said in the CNBC interview. I think there is still a lot that can unwind, especially if you look at how undervalued yen is.
“That is going to change the valuations for the next one to two years to come. That’s going to have spillover effects, ” he added.
The Bank of Japan recently hiked rates for the first time in more than a decade, and that move rocked global markets and risk assets, including bitcoin. With low rates, traders would borrow in yen for cheap to invest in another asset which provided a higher rate of return – creating the carry trade.
A pop in rates was reflected in trading strategies, with a knock-on effect on almost every market. BTC dropped 15% within a 24-hour period, which is one of the largest drops in recent years—major tokens sliding at 22%.
Earlier this August, the deputy governor of the BOJ commented that the central bank would not raise interest rates amidst unstable markets, thus having an effect on yen carry trades and risk assets.
A former BOJ official has since said that the central bank would defer additional interest rate hikes to next year, a suggestion that it prefers market stability over the near term. Aside from Bitcoin, traders are also remaining bullish over TON.
Toncoin’s TON jumped 7% in the Asia trading session on Wednesday, according to CoinDesk Indices data. Advocates of the Toncoin ecosystem point to its growing GameFi and close integration with Telegram as factors that could make the token continue an upward trend.
The number of players of TON games break the ceiling glass of previous blockchain games by the viral social growth in Telegram. And some TON games have already verified the significant revenue from gameplay itself, not token selling,” said John Cheang, Asia-Pacific lead of the TON Foundation, in an email interview, also pointing to TON’s record-high blockchain transactions per second as a reason why it can scale.
It is in this respect that Ben El-Baz, managing director of HashKey Global and an investor in projects in the TON-ecosystem, such as Catizen, said this move would put the advantage in Telegram’s hands to “attract more developers, which represents a great opportunity for TON,” in an email comment.
FAQs
1. Why did Bitcoin cross the $61,000 mark?
- Bitcoin’s rise past $61,000 is likely due to a combination of factors, including increased institutional interest, positive market sentiment, and broader adoption. It may also be influenced by economic uncertainty, inflation concerns, and traders seeking safe-haven assets or alternatives to traditional currencies.
2. What is the U.S. CPI, and why does it affect Bitcoin?
- The Consumer Price Index (CPI) measures inflation by tracking the average price change of goods and services over time. High CPI numbers indicate rising inflation, which can affect markets, including Bitcoin, as investors may look to hedge against inflation by buying assets like Bitcoin that are viewed as stores of value.
3. How does inflation impact Bitcoin’s price?
- Rising inflation often leads investors to seek alternatives to fiat currencies, which may lose purchasing power due to inflation. Bitcoin, often referred to as “digital gold,” is seen by some as an inflation hedge. As inflation expectations rise, demand for Bitcoin can increase, pushing its price higher.
4. What is the Yen carry trade, and how does it relate to Bitcoin?
- The Yen carry trade involves borrowing Japanese yen at low-interest rates and investing in higher-yielding assets elsewhere. Unwinding of the carry trade occurs when traders reverse these positions, which can affect global markets. This activity can impact the volatility of various assets, including Bitcoin, especially if traders move funds out of higher-risk assets like cryptocurrencies.
5. Why are traders cautious ahead of U.S. CPI data?
- Traders are cautious because the U.S. CPI data could provide insights into the Federal Reserve’s future monetary policy decisions, particularly regarding interest rates. Higher-than-expected inflation could lead to tighter monetary policies, such as interest rate hikes, which can impact risk assets like Bitcoin and other cryptocurrencies.