The cryptocurrency market traded flat in the past week, even as major cryptocurrencies traded in the red. The market capitalization remained above $1 trillion. However, major digital tokens like Bitcoin and Ethereum fell more than 3.5 percent.
On Friday at 4 p.m., Bitcoin had the highest market capitalization and was trading at $23,157, more than 3.6% below the price of seven days ago. However, in the last 24 hours, it gained more than 1 percent.
Ethereum, the second largest cryptocurrency, was trading at $1,661, up 2.27 percent in the last 24 hours. However, in the last seven days it has fallen 3.7 percent.
On Friday, the Reserve Bank of India (RBI) raised the repo rate by 50 basis points to 5.4 percent to rein in rising inflation. In India, inflation has been above the maximum tolerance level of 6 percent for six months.
However, the rate hike by the RBI is unlikely to affect crypto prices in India, according to experts.
“RBI MPC meetings independently have little or no impact on global crypto markets. Historically, Bitcoin prices always react to the results of US FOMC meetings.” Jaikrishnan G, Partner, Financial Services Consulting, Grant Thornton Bharat, said.
Also Read: ED Freezes Rs 64-crore Bank Deposits From Cryptocurrency Exchange WazirX
He continued: “On a macro level, all major economies have raised policy rates of late to control inflation and this is sure to have a negative short-term effect on crypto prices.”
Experts continue to ring cautionary bells
Global inflation has remained high. Even after cooling off marginally, commodity prices have not reached the same levels as six months earlier. Experts believe that investors still need to be cautious.
“We expect a range-bound move in the crypto market, but anything negative in terms of inflation, recession, or regulatory issues may affect sentiments and trigger a sell-off again,” Dileep Seinberg, founder and CEO of bill payment platform and Crypto utilities. MuffinPay said.
On Thursday, the UK’s central bank, the Bank of England, raised interest rates to the highest in 27 years at 1.75 percent. He warned that the country would enter a recession at the end of 2022 and last until the end of 2023.
On July 27, the Federal Reserve (Fed) also raised its key interest rate by 75 basis points. The country’s GDP has contracted for the second consecutive quarter, with inflation above 9%.
“Over the coming weeks, given the sentiment of rate hikes in lines expected going forward, with the need to provide a boost to growth, markets will factor in the macro environment and we see strong consolidation in key support prices. said CoinDCX. research team told Business Standard.
However, some experts remain optimistic about the future of cryptocurrencies in India.
“While cryptocurrency prices have been generally stable, there seems to be some inflection in the coming weeks,” said Raj A Kapoor, Founder and CEO of India Blockchain Alliance, “I really believe that cryptocurrencies will be net positive in 2022 because any brief declines driven by rate hikes will be offset by increased adoption of this asset class by active institutional and retail traders.”