Cryptos surge to record highs on inflation fears

 Cryptos surge to record highs on inflation fears

Cryptos surge to record highs on inflation fears.

Spread the love

The start to the new week was spectacular for the cryptocurrency market with major cryptos rallying to new all-time highs. Investors poured money into Bitcoin and Ethereum, the two major cryptocurrencies, using them as a hedge against rising inflation, to the detriment of gold.

As a result, the total crypto market capitalisation increased by approximately $122bn rising from $2.753trn to $2.865trn in 24 hours on Monday.

Bitcoin broke through its resistance level of $64,000 and traded between $65,000 and $66,000 on Monday morning, surging to a record high of $68,000 on Tuesday. It eclipsed a previous record set in late October.

Ether, the native token of the ethereum blockchain surpassed $4,800 for the first time in its history. According to CoinDesk, Ethereum has gained nearly 550% in its per-unit value so far this year.

Inflation as a major consideration for younger investors

Worried by rising inflation, investors are flocking to buy Bitcoin and Ethereum as an alternative to gold, which has been a traditional inflation hedge for an older generation. Younger retail investors, however, appear to favour crypto investment.

Wildred Daye, the head of the trading platform Serurititize Capital told the Guardian:

“Inflation is a major consideration for investors today, and the younger generation of investors often favours cryptocurrency as a hedge over gold. In fact, while gold has slid throughout the year, bitcoin and ethereum have more than doubled. Retail investors have played a major role in fuelling this shift and institutional investors are increasingly following suit.”

A combination of different factors including a resurgence of COVID cases, fuel shortage and rising consumer prices has knocked investor confidence. Alongside the cryptocurrency market, gold prices also surged, consolidating near two-month highs above $1820 on Tuesday.

Many analysts believe that bitcoin and ethereum will continue to rise in the weeks to come.

capital.com

Capital.com is an FCA, ASIC and CySEC-licensed fintech company committed to building the world’s best trading experience. It’s that simple. The AI-enabled technology that powers our platform isn’t just unique – it’s award-winning.

Related post