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Ether price heads toward $2,000 on back of CPI update
The price of ether has closed the distance to the $2,000 mark on Wednesday, as US inflation came in below expectations.
At the time of writing, ether was trading at $1,841, up 8% over the past 24 hours. This puts ether at a price not seen since last June and shows that it has retraced one of its large drops in price.
Ether’s price action on Wednesday comes after US inflation came in below expectations, unchanged from June and up 8.5% year-on-year (below expectations of 8.7%).
Matt Weller, global head of research at Forex.com told The Block that today’s “softer-than-expected inflation report might help reduce the headwind of rising US interest rates for Ethereum and other crypto assets,” before adding that the Fed will want to see a “sustained trend of falling inflation before even considering a pivot to reducing interest rates.”
Weller concluding that, “regardless of how smoothly next month’s merge is, the expected 0% inflation rate of ether supply will be very attractive relative to the 8% – or more – inflation rate of the US dollar.”
BlockFi’s daily trading update echoed Weller’s sentiment, adding “attention will now likely be turned toward the Fed and whether they deem inflation to be problematic enough to approve another 75 bps rate hike.”
Another factor impacting ether’s price on Wednesday was the Goerli merge – which is the last testnet merge before the Ethereum blockchain moves from a proof-of-work to a proof-of-stake consensus mechanism in September. The Goerli merge is expected to take place early morning UTC on August 11.
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