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Meme coins Shiba Inu (SHIB) and PepeCoin (PEPE) led the market’s gain since yesterday as Bitcoin (BTC) briefly breached $30,000.
Meme coins are tokens inspired by internet memes or have become popular within online communities. SHIB gained 9.8% overnight, while PEPE recorded 12.7% according to CoinGecko data.
On Tuesday, Bitcoin reached a new monthly peak of $30,126, however, it subsequently pulled back to around $29,780.
Despite this pullback, the BTC price remains up by 2.2% since yesterday, while Ethereum (ETH) is trading 1.7% higher.
The total crypto market capitalization increased by around $25 billion, marking a 2% rise, during the same period.
The bullish market move comes amid the launch of PayPal’s stablecoin PYUSD and the U.S. Federal Reserve launching a program to clarify crypto regulations.
On Tuesday, the U.S. central bank initiated a “novel activities supervision program” to oversee crypto activity conducted through state-regulated banks.
The Fed also laid guidelines for stablecoin issuance, and transactions to “conduct the activity in a safe and sound manner.” The alpha bank indicated it plans to provide “greater clarity” for entities as “financial services and related technologies continue to evolve.”
Of late, regulators in the US have faced harsh criticism for their lack of regulatory clarity on the matter.
Through the new supervision program, the Fed will look to identify and eliminate risks associated with DeFi integrations through application programming interfaces (APIs), issuance of dollar tokens, and tokenization of securities.
The American central bank wishes to ensure that “regulation and supervision” continues to “allow for innovations.”
All eyes on CPI
While PayPal's stablecoin launch may have boosted Bitcoin-buyer sentiments, the price struggled to hold above $30,000.
Before a key reversal in sentiment, investors are anxiously awaiting tomorrow’s CPI report, which lays out the country’s progress in battling inflation.
Economists surveyed anticipate that inflation will come in at 3.3% year-on-year since last July, a minor uptick from last month’s reading. Though this is much lower than last year’s inflation scare, the metric is still above the Fed’s target rate of 2%.
These U.S. inflation figures play a crucial role in influencing the Federal Reserve's decisions concerning rate hikes and overall economic health.
The dollar’s surge amid weaker economic data from China, whose exports and imports last month dropped more than expectations, and Japan, which recorded a fifteenth consecutive slump in real wages, may have also affected the price of high-risk assets such as Bitcoin.
The dollar index (DXY), which values the U.S. dollar against other global reserve currencies, gained 0.46% on Tuesday. DXY usually has a negative correlation with Bitcoin and other risk assets.