Bitcoin, crypto prices buoyant, while Coinbase hits all-time low as Silvergate sinks 12%

Quick Take

  • U.S. inflation came in below expectations at 7.1% in November.
  • Bitcoin hurtled towards $18,000 following the news, though it has since pared some of the gains. Crypto stocks were lower.
  • The Federal Reserve’s policy-setting committee is expected to announce its latest interest rate increase tomorrow. 

Bitcoin and other crypto prices are holding onto gains after better-than-expected inflation data ahead of the Fed's last rate decision of the year.

Crypto stocks didn't fare so well, however, with Coinbase hitting an all-time low. Silvergate sank almost 12%.

Bitcoin was trading at around $17,750 at 4 p.m. EST, up over 3% in the past day, according to TradingView data. Most of bitcoin's gains followed the U.S. CPI data at 8:30 a.m. EST. 

Ether continues to trade above $1,300, having tacked on over 3.5% throughout the day. Binance's BNB token pared some of its losses, although it is still down over the past day, dipping 2.1%. Binance resumed USDC withdrawal requests around midday EST. The exchange had temporarily stopped processing withdrawals due to inadequate reserves on the platform, according to Binance CEO Changpeng Zhao.

After today's inflation data, markets are now trained on the U.S. Federal Reserve tomorrow. The central bank's policy-setting committee — the FOMC — is set to announce its last interest rate decision of the year. A 50 basis point increase is widely expected after several 75 basis-point bumps.

Today's CPI data materially increases the chances the Fed will raise rates by just 50 basis points tomorrow, Marc Arjoon, an analyst at CoinShares, told The Block. "A confirmation of this 50 basis points hike tomorrow will see a further marginal upside," he said.

Ivan Kachkovski, executive director of crypto and FX research at UBS, echoed this. "Bitcoin and ether have recently been trading as risk assets such as U.S. micro-cap stocks, thus sensitivity to any slowdown in rate hikes beyond market expectations would likely be significant," he said.

Arjoon expects Fed Chair Jerome Powell to be less hawkish tomorrow compared with his speech in November, which roiled markets at the time. 

Crypto stocks 

The S&P 500 and the Nasdaq 100 closed higher, up 0.7% and 1.1%, respectively.  

Coinbase slumped 9.2%, according to Nasdaq data. Shares of the exchange closed below $40 for the first time since debuting in April 2021 and hit an all-time low of $38.50 toward the end of today's session. 

Last week, CEO Brian Armstrong said revenue for 2022 will likely be down 50% year-on-year amid the ongoing market tumult, in line with analyst estimates.

Silvergate shares also sank, plunging 12% to $18.73, a more than two-year low. Block and MicroStrategy bucked the downtrend in crypto-related stocks, adding 7.3% and 2.9%, respectively. 


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