Boosts have lifted the cryptocurrency markets with a 5.5% increase in total capitalization seen on May 15th. This comes after the United States revealed inflation and retail sales data. However, the leading digital coin, Bitcoin, has overshadowed its closest rival, Ether (ETH), which hasn’t managed to enjoy the same upward trajectory, falling by an underwhelming 22% since the kick-off of 2024.
Consumer price index (CPI) data from the U.S. that revealed a year-over-year rise of 3.4% in April has been well received by crypto markets. This aligns neatly with market predictions. On the other hand, the confirmation of steady retail sales in April has been a bit of a shock to investors who were banking on a forecasted growth of 0.4%. This has pushed the expectation of the United States Federal Reserve implementing strategies to kickstart the economy into reality.
Strategies from the Fed could include buying up government securities to pump money into the economy, as well as reducing the rate banks can borrow from the Reserve. An increase of financial elasticity in the system can act as a catalyst changing economic behaviors and expectations. Strangely, a slump in the economy potentially holds the silver lining of more cash being circulated for investment in scarce assets, the likes of cryptocurrencies, gold, and stocks. However, pumping more money into the economy, regardless of interest rates, will invariably lead to inflation over time.
Ethereum’s current sticky patch of not crossing the $3,000 threshold is thought by some experts to be an outcome of an anticipated decision by the U.S. Securities and Exchange Commission (SEC) concerning the VanEck’s Ethereum ETF application. The decision is expected on May 23 and has caused some traders to take a wait-and-see approach before taking the plunge in investing. The SEC’s decision could cause a hiccup in the market in the short-term if it’s unfavorable.
The Ethereum futures market, typically priced 5% to 10% higher than the usual Ethereum spot prices, has maintained a 9% Ether futures premium over the past couple of weeks. This level signifies a lack of bullish feeling in the wider market, mirrored in the demand balance between Ether call (buy) and put (sell) options trading at about the same prices.