This week saw a positive outlook for the crypto market, with Bitcoin (BTC) and Ethereum (ETH) both reaching new highs. The news of a slowdown in US inflation in December was seen as a sign that the Federal Reserve may soon slow its interest rate increases, which was welcomed by the markets. This positive sentiment has been reflected in the performance of the top 20 coins, none of which posted substantial losses. This is a promising start to the year for the crypto market, and investors will be hoping that the green shoots of recovery will continue to grow.
Cryptocurrency markets had a strong week, with Bitcoin (BTC) and Ethereum (ETH) both posting significant gains. BTC crossed the $20,000 mark on Friday evening, up 23% in the last week, while ETH rose 21% to cross the $1,400 mark on Thursday. This was the first time ETH had seen such highs since November 8, when FTX cratered and brought the crypto market down with it. The stock market also had a good week, with the S&P 500 and Nasdaq both posting their best weekly performances since November. The strong performance of both the crypto and stock markets is a sign of investor confidence in the economy, and could be a sign of a strong 2021.
With Bitcoin and other digital assets rising in tandem with traditional markets. While some traders welcomed the trend, others cautioned that Bitcoin was founded to be an alternative financial system to Wall Street and that it may be losing its way. The biggest winners of the week, however, were those that had crypto–specific news that was independent of macroeconomic trends. AVAX, the native token of the Avalanche blockchain, saw a 29% surge on Wednesday after news that its developer Ava Labs will soon offer crypto infrastructure through a partnership with Amazon Web Services. This development will help encourage adoption of Avalanche across the public and private sectors, and AVAX ended the week up 44%.
Lido, the liquid staking protocol, saw a 41% surge in its token price this week due to encouraging developments on the Ethereum network. Ethereum recently transitioned to a proof–of–stake system, allowing network participants to earn newly minted ETH as a reward for staking pre–existing ETH with the network. Lido is a leading service that allows users to pool their ETH and stake it to earn more; over $7 billion worth of ETH has been staked through the project. The upcoming Shanghai upgrade to the Ethereum network will enable users to withdraw their staked ETH, and with Ethereum’s core developers reporting no issues with the update’s rollout, the market is optimistic. Additionally, Solana‘s token SOL has seen a 65% increase over the past seven days to $22.54 as of Saturday morning. This is likely due to its close ties to the FTX ecosystem and Sam Bankman–Fried.
