A crypto market rally is underway, with the market capitalization of all tokens hitting the important milestone of over $4.06 trillion. Bitcoin is hovering near its all-time high, while Ethereum has soared above $4,600. Some of the top tokens were Fartcoin, Jasmy, and Chainlink. So, why is crypto going up today?
Crypto going up as Federal Reserve rate cut odds jump
One reason why the crypto is going up is that the odds of the Federal Reserve interest rate cut odds have risen in the past few weeks. These odds jumped after the US published a weak non-farm payrolls (NFP) report, which showed that hiring had largely stalled as companies remained concerned about Donald Trump’s tariffs.
The odds jumped again on Tuesday after the US published the latest consumer price index (CPI) data. This report revealed that the headline consumer price index remained at 2.7% in July, even as the core figure jumped to 3.1%
Consequently, Polymarket odds of a Fed cut jumped to over 90%, while the CME Fed futures number jumped to over 87%. Cryptocurrencies and other risky assets thrive when the Federal Reserve is cutting interest rates as doing that reduces the cost of capital.
Bitcoin price is close to its all-time high
The other reason why crypto is going up led by Fartcoin, Jasmy, and Chainlink is that Bitcoin made a strong breakout this week and neared its all-time high.
Bitcoin price trades at $120,000, down from this week’s high of $122,500. As such, traders are hopeful that the coin will continue rising and possibly reach its all-time high.
Altcoins tend to perform well during Bitcoin’s strong bull run due to the fear of missing out (FOMO) and the fact that these tokens are significantly cheaper than BTC.
Rising institutional demand
The crypto market rally is happening because of the rising institutional demand for these tokens. Data shows that spot Ethereum ETFs had net inflows of $523 million on Tuesday, lower than Monday’s $1.02 billion. These funds have had net cumulative inflows of $11.36 billion.
BlackRock’s ETHA ETF holds over $14 billion, while Grayscale’s ETHE and Fidelity’s FETH have $5.1 billion and $3.6 billion in assets, respectively.
Spot Bitcoin ETFs added $65 million on Tuesday, a drop from the previous day’s $178 million. These funds have had a cumulative inflow of over $54 billion, with IBIT having over $58 billion in inflows and $89 billion in assets.
At the same time, the number of treasury companies is soaring. For example, Tom Lee’s BitMine holds coins worth over $3.87 billion and is now raising over $20 billion for this accumulation. SharpLink is also raising funds to buy ETH.
All these companies are aiming to achieve the success that Strategy has as its market capitalization soared from below $1 billion in 2020 to over $115 billion today.
Crypto rally happening as Fear and Greed Index jumps
The crypto market is gaining steam as the Fear and Greed Index moves to the greed zone of 62. A rising Fear and Greed Index is a sign that animal spirits and the fear of missing out (FOMO) is returning to the market.
Historically, cryptocurrencies do well when there is greed in the market. Indeed, data shows that investor demand is rising, with the 24-hour volume rising by 12% to nearly $220 billion.
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