Why Shiba Inu, Dogecoin, and Bitcoin Are Rising Right Now?

Why Shiba Inu, Dogecoin, and Bitcoin Are Rising Right Now

Following a mixed inflation report on Monday and a Senate Banking Committee hearing on the future of crypto regulation, many cryptocurrencies were rising for a second day in a row on Tuesday.

As of 10 a.m. ET on Tuesday, shares of Bitcoin (BTC 10.67%), the largest cryptocurrency in the world, had increased by 2.5% since late Monday afternoon. Shiba Inu (SHIB), up 5.50%, and Dogecoin (DOGE), up 3.7%, respectively, were meme tokens.

Investors continued to digest the latest inflation data and news on the regulatory front

Investors are still processing the Consumer Price Index (CPI) report for January, which was released on Monday by the Bureau of Labor Statistics. A crucial indicator of inflation, the CPI measures the prices of a market basket of consumer goods and services.

Economists had anticipated a 0.5% increase in January’s CPI, which was 6.4% higher than the previous year. The CPI increased by 5.6% on a core basis, excluding the more volatile prices of food and energy. In January, roughly half of the rise in prices was caused by the cost of housing. The report appeared to be mixed. Yes, there are indications that inflation is decreasing, but the process may not be smooth.

“The picture of inflation will not be altered by this report; In a research note, Pantheon Macroeconomics chief economist Ian Shepherdson wrote, “both hawks and doves will find something to highlight.”

The outlook for inflation is critical for crypto investors: The Federal Reserve will be able to stop raising interest rates if it can lower it. Cryptocurrency prices have fallen as a result of investors losing interest in riskier assets as a result of higher interest rates.

In other news, on Monday, the Senate Banking Committee held a hearing on crypto regulation, and the members clearly displayed their divergent viewpoints. The Democrats in the Senate said they were more worried about crypto as an asset class and were willing to impose stricter regulations around it. Senate Republicans want less regulation and don’t want to discourage crypto firms from setting up shop in the United States. Investors love the partisan gridlock in Congress in this case; The division makes it less likely that a complete overhaul of crypto regulation will be passed in the near future. This may be viewed as a relief following the Securities and Exchange Commission’s recent crackdown on crypto firms, which frightened investors.

The Wall Street Journal reported that Celsius, a crypto company that has filed for bankruptcy, has reached a deal to sell its retail platform to NovaWulf Digital Management. This was minor news. Users who still have assets locked on the platform would be able to get some of their assets back if the deal is approved. Investors are likely pleased to see at least one of these cases moving toward a possible resolution, as more crypto companies have declared bankruptcy in recent months.

Finally, Elon Musk, the CEO of Twitter, recently posted a picture of his Shiba Inu dog Floki at his desk on Twitter with the following caption: “The new CEO of Twitter is amazing.”. Dogecoin is strongly supported by Musk, and when he tweets positive things about it, meme tokens tend to rise.

In the end, I don’t think the CPI data from January gave the Fed much reason to stop raising rates early; This year, I think the Fed will raise the benchmark federal funds rate at least once or twice more. The regulatory picture was also uncertain after the hearing by the Senate Banking Committee. Cryptocurrency regulations could still become more stringent and less accommodating in the future.

For the time being, I anticipate that most cryptocurrencies will continue to fluctuate. However, meme tokens do not interest me, and I will continue to favor Bitcoin in the long run.