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Cryptocurrency prices bounced back on Friday after another set of encouraging US consumer inflation data. Moonriver (MOVR) price rose by more than 60% on Friday while Cronos ID and Optimism (OP) jumped by over 48% and 28%, respectively. Other tokens that surged were Raydium, Bonfida, and Solend.
The most important driver for cryptocurrencies was the latest US inflation data. According to the US Statistics Agency, the personal consumption expenditure (PCE) contracted by minus 0.1% in November. This drop led to a YoY increase of 2.6%, down from October’s 2.9%. It was also lower than the median estimate of 2.8%.
The core PCE, which excludes the volatile food and energy prices, rose by 0.1%, lower than the expected 0.2%. It rose by 3.2%, which was also better than the expected 3.3%.
These numbers, which are the Fed’s favourite inflation gauges, show that the country’s inflation was coming down at a faster pace than expected. They also mean that the Fed will likely start cutting rates in the first half of the year, which is a positive thing for risky assets like stocks and crypto.
The rising hopes of Fed cuts partially explain why Moonriver, Optimism, and Cronos ID rallied. Cronos ID, which is equivalent to Ethereum Name Service, surged hard after it was listed by Crypto.com, one of the biggest exchanges in the world. In most cases, cryptocurrencies tend to do well after being listed by a major exchange.
Cronos ID is listed in the https://t.co/vCNztATkNg App 🔔
— Crypto.com (@cryptocom) December 22, 2023
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For more details – https://t.co/RpDClwv1co@cronos_identity pic.twitter.com/T0Z7BaI2Y7
Optimism, one of the biggest layer-2 networks, on the other hand, rallied as some of its top ecosystem dApps soared. For example, Velodrome, its biggest DEX, saw its token soar by over 30% as its ecosystem volume rose. It also jumped as the number of users in Optimism soared.
Moonriver, a Kusama parachain, rose as the DeFi TVL in its key platforms like Moonwell Apollo and Solarbeam jumped. Still, Moonriver is a tiny part of the blockchain industry with a TVL of over $7 million.
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