Pre-market actions: Don't look now, but crypto is making a comeback

The prices of ethereum and other major digital currencies have also risen over the past two months, raising hopes that this nascent market may have bottomed out.

Coinbase announced a loss for the second quarter after the closing bell on Tuesday. This follows Monday’s revenue warning from Nvidia (NVDA)whose graphics cards are a key part of many bitcoin mining rigs.

With all of this in mind, some experts believe that bitcoin could be stuck in a tight range for the foreseeable future. So yes, investors may not have to worry about prices falling much further. But a huge rally may not be in the cards either.

“Bitcoin walks on water,” wrote Martin Hiesboeck, head of blockchain and crypto research at Uphold, a crypto wallet company, in a recent report. “The market is down.”

Hiesboeck added, however, that it is encouraging to see that “every move down is immediately greeted by large orders” to buy from large institutional investors. But he expects the rampant volatility that has become a hallmark of crypto trading to continue.

“Many investors fear that the macro outlook will improve anytime soon, so they sell every price increase. At the same time, institutions and sophisticated investors seem to think that bitcoin has bottomed and continues to build “, he said, adding that “such moves often lead to excessive price action”.

This kind of volatility may finally be easing a bit as more traditional Wall Street companies enter the crypto market. Bitcoin bulls point out that a recent deal between Coinbase and the money management giant black rock (noir) is a promising sign.

“The partnership between BlackRock and Coinbase is a huge deal,” said Jack Cameron, co-founder of Luna Market, a metaverse advertising and technology company, in an email.

Cameron added that since there is “still a stigma” associated with bitcoin, the fact that more companies like BlackRock are diving into the digital asset sector is good news.

“Plus the institutional money [that] joins the space, the better for all crypto holders,” he wrote.

It may be true. But in the short term, investors might wait to see what happens on the inflation front. Bitcoin, despite proponent hype that it is digital gold, has proven not to be an asset that performs well when inflationary pressures rise and interest rates rise.

So, investors might first need to see signs that inflationary pressures are finally beginning to peak before deciding to push bitcoin prices even higher. Traders will have a better idea after the release of the highly anticipated July Consumer Price Index (CPI) report on Wednesday morning.

“Inflation is what killed bitcoin late last year, and if price pressures show significant signs of easing, bitcoin may be in a position to surge above its recent trading range,” Edward Moya, senior market analyst for the Americas at OANDA, a currency exchange. company, said in a report.

Is inflation finally starting to subside?

Inflation is on the minds of consumers, investors, politicians and, of course, the Federal Reserve. Will the pace of price increases finally start to calm down a bit?

Economists polled by Reuters expect consumer prices to have risen 8.7% over the past 12 months. That’s still a historically high level, but it would be a slowdown from the 9.1% increase through June.

Investors recognize that inflation is not going to magically disappear overnight. But any sign of price pressures beginning to ease (even modestly) should be applauded.

Consumers would also be delighted. My CNN Business colleague, Nathaniel Meyersohn, reported earlier this week that the food giant Tyson (TSN) noticed a large impact of inflation: buyers are switching from more expensive beef to cheaper chicken. Americans have faced sticker shock at the supermarket on a regular basis over the past year.

But there’s good news for consumers who prefer clicks to bricks. My colleague Matt Egan reports that after more than two years of monthly online retail price increases, Adobe recently reported that e-commerce prices fell 1% year over year in July.

Prices for electronics and toys sold online fell the most. Clothes were also cheaper to buy online. But grocery store prices rose in July. And prices for pet products online jumped almost 13%, hitting a record high in the process.

As a relatively new owner of two kittens, which means I am also now a Soft (CHWY) customer, I now fully understand the urge to spend big on furry friends.

Rising energy costs are hitting UK consumers hard

Inflation is a global problem. And it’s particularly painful for consumers in the UK, who face the prospect of significantly higher energy bills this winter.

My CNN Business colleague, Anna Cooban, notes that around a third of UK households will see their income fall below the poverty line after paying their heating bills in the first quarter of 2023.

Indeed, energy costs are expected to more than double by January. Energy prices have already soared 54% this year, leading some Britons to choose between ‘heating and eating’. The UK government earlier this year approved a consumer relief package to try to ease this inflationary burden.

But some argue the support does not go far enough to offset rapidly rising fuel costs. And more stimulus checks may not be in the cards either. British Foreign Secretary Liz Truss, who is the main contender to replace Boris Johnson as Britain’s next prime minister, has offered tax cuts… but not more outright handouts.

Next

US consumer price index for July; Earnings of disney (SAY), Fox Company (FOXA), Wendy’s (MAGNIFYING GLASS) and Bumblebee

Coming tomorrow: US Producer Price Index for July; US weekly jobless claims: OPEC monthly oil report; Earnings of Cardinal Health (HAC), Azul (AZUL), Hanesbrands (HBI), six flags (SIX)Warby Parker and Canada Goose (GOOS)