Bitcoin climbs above $18,000; Ethereum and Dogecoin are also increasing

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What happened

Cryptocurrencies rose Thursday morning as new inflation data for December came in line with expectations.

Since Wednesday afternoon, the world’s largest cryptocurrency, Bitcoin (BTC 4.32%), has traded about 3.3% higher and was above $18,000 at 10:12 a.m. ET today . The world’s second largest crypto Ethereum (ETH 4.57%) traded around 3.5% higher, while the meme token Dogecoin (DOGE 3.17%) rose around 1, 1%.

So what

Investors were eagerly awaiting the new key inflation data released this morning. The US Bureau of Labor Statistics reported that the consumer price index (CPI), which tracks the cost of a basket of goods and services, fell 0.1% in December from november. Year-over-year, the CPI rose 6.5%, in line with economists’ expectations.

Image source: Getty Images.

Specifically in the CPI, food prices rose just 0.3% on a monthly basis, which is their weakest month of growth in some time. Energy prices fell 4.5% and used vehicle prices fell another 2.5%. But the costs of housing, transportation services and medical care all increased on a monthly basis.

House prices rose 0.8% in December, outpacing the growth they experienced in November. The rent index rose 0.8% and out-of-home accommodation rose 1.5% after falling in November. Housing is one category in particular that has the power to make inflation more persistent.

December was the first time in 2.5 years that prices actually fell on a monthly basis. But the Dow Jones rose only modestly, at the time of this writing, after what was a largely positive week, so investors may have already priced in some of this news. Crypto prices appeared to be largely in the green this morning.

“Bitcoin has been in a downtrend for over a year now, which is a standard period of a crypto bear market,” Vijay Ayyar of crypto exchange Luno told CNBC This Morning.

He added: “We have had many negative events over the past year, and if you look at the reaction of prices to these events, in general, it is decreasing less and less – an indication that the market is accepting pretty well the news. , the selling pressure is being absorbed and so we are moving into an accumulation phase.”

In other news, Samsung Asset Management Hong Kong, a division of Samsung Asset Management, is gearing up to launch a Bitcoin futures exchange-traded fund (ETF) as investors in the region take more interest in crypto. The ETF will follow the spot price of the coin by investing in Bitcoin futures.

Now what

At this point, the cooling of inflation is absolutely necessary as it could lead to a more risky environment. Investors have really fled the industry in recent months after the FTX debacle cast a dark cloud over the crypto.

Ultimately, I think Bitcoin and Ethereum will end up being good long-term buys. Nothing from the collapse of FTX has changed my mind about these two cryptocurrencies, and I still think they are the two best right now. Although it may take longer to get over the FTX scandal, I think crypto is here to stay.

I continue to have very little interest in Dogecoin due to its lack of utility and the fact that its blockchain network is nothing special from a technical standpoint.

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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