Why Altcoins Are Up By Double Digits This Week

As we entered the final weeks of summer, the crypto market started to heat up like it was the middle of July. Numerous news developments and trends that have generated rallies in digital coins and tokens in the past have begun to stimulate the market again. As a result, many rose at comfortable double-digit rates throughout this week.

There was also plenty of variety in that growth, data compiled by S&P Global Market Intelligence shows. Smart contract platform anchor coin Throne (CRYPTO: TRX) rose nearly 19% over the period, with the utility symbol Link (CRYPTO: LINK) not long ago a 17% gain. Everything but the kitchen sink chain BNBhis (CRYPTO: BNB) The native cryptocurrency advanced nearly 13% and meme cryptocurrency holders pepe (CRYPTO: PEPE) they were certainly pleased with its nearly 18% growth.

A very nice late summer comeback

Cryptocurrencies experienced a slide — well, let’s call it a “correction” — earlier this month. The release of US economic data has raised fears of a looming recession, and this type of environment is not good for most financial assets. It’s especially threatening for assets considered to be high risk, and even after all this time, most cryptos (with the possible exception of Bitcoin and in short Ethereum) are included in this category.

Adding to this growing fear, the Federal Reserve (Fed) remained steadfast in its policy of leaving interest rates unchanged. All things being equal, lower rates tend to encourage market players to pursue riskier investments, hence the crypto world’s thirst for a Fed rate cut or more.

The situation changed significantly in the middle of the month. Last week, the inflation reading showed that the current macroeconomic bogeyman appeared to be fading considerably. Year-on-year growth in the consumer price index (CPI) was 2.9%, the first time it has fallen below 3% since March 2021 with the pandemic. This figure was also well below the forecasts of many economists.

This good news was compounded by this week’s analysis from the influential research organization, the Conference Board. Leading economic indicators (LEIs), considered by many to be reliable signals of potential economic distress, fell 2.1% in the six months to July. This compared favorably with the 3.1% decline in the previous semester. According to the board, this kind of trajectory “no longer signals a recession ahead.” While economic growth is expected to slow, this should not be as drastic as some may worry.

The story continues

It’s almost time for the cuts!

Meanwhile, on Friday, crypto investors — and the rest of the financial world — got the surest signal yet that the Fed is about to grab the scissors. Chairman Jerome Powell has spoken of rate cuts as if they were an event soon to be realized, rather than a vague possibility or rank speculation.

“The time has come for politics to adapt,” he said in his keynote speech at the organization’s annual retreat. “The direction of travel is clear, and the timing and pace of rate cuts will depend on the data received, the evolution of the outlook and the balance of risks.”

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Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Chainlink, and Ethereum. The Motley Fool has a disclosure policy.

Why Altcoins Are Up by Double Digits This Week was originally published by The Motley Fool