Market Wrap: Bitcoin Surges as Fed Governor Talks Down 100 Basis Point Rate Hike

Hi, I’m Jimmy He, here to take you through the day’s crypto market highlights and news.

Bitcoin surged in Thursday trading after Federal Reserve Governor Christopher Waller said he supported an interest rate hike of 75 basis points (0.75 percentage point) in July, easing fears of a larger 100 basis-point raise to combat high inflation.

The largest cryptocurrency by market capitalization was trading at around $2,680, up 4.8% in the past 24 hours.

Traders of Federal funds on the CME exchange now see a 56% likelihood that the Federal Reserve will raise the target interest rate by 75 basis points to a range of 2.25%-2.5% this month. A day earlier, the odds were seen at 20% after an unusually hot Consumer Price Index reading for June prompted traders to shift their bets to a 100 basis-point increase.

VGX, the native token of bankrupt crypto lender Voyager Digital, tripled in price over three days in a short squeeze, reaching a high of 95 cents on July 13. An unknown firm named MetaFormLabs contributed to VGX’s rally, tweeting about a “#PumpVGXJuly18” plan with a $5 target price point for July 18.

“That’s an ambitious goal considering Voyager’s problems. Besides, crypto pump schemes have a bad reputation for being exit strategies for whales and scammers and trapping retail investors on the wrong side of the market,” CoinDesk’s Omkar Godbole reported.

VGX has since slumped back to around 46 cents, down 52% from its Wednesday high.

Most altcoins were in the green, with Uniswap’s UNI token leading market gains. UNI spiked 21% over the past 24 hours after being added to broker Robinhood’s crypto listings.

Polygon’s MATIC token spiked 19% after the Ethereum scaling tool was selected to participate in Disney’s 2022 Accelerator program.

Ethereum rose 10% as the network’s ninth shadow fork went live amid testing for its upcoming Merge.

Celsius Network filed for Chapter 11 bankruptcy protection late Wednesday, becoming the third liquidity-strapped crypto lender to do so in July, following Voyager Digital and Three Arrows Capital.

“This is the right decision for our community and company,” Celsius co-founder and CEO Alex Mashinsky said in a statement on Wednesday. “We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”

During the past couple of weeks Celsius has been paying off all of its debt to decentralized finance (DeFi) platforms Maker, Aave and Compound, freeing up locked collateral.

Celsius said in a statement the firm has “$167 million in cash on hand” to provide liquidity and “support certain operations during the restructuring process.”

Celsius has also filed a series of motions to continue operations as usual, including “requests to pay employees and continue their benefits without disruption.” However, the crypto lender said that it will not be “requesting authority to allow customer withdrawals at this time.”

In June CoinDesk quoted people familiar with the situation saying Goldman Sachs (GS) was seeking to raise $2 billion from investors to buy distressed Celsius assets if the company declared bankruptcy. The investment banking firm has not confirmed any further actions yet.

Celsius’s CEL token plummeted to a low of 44 cents within hours of filing for bankruptcy and is now trading at around 76 cents, 18% down in the last 24 hours.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.