By Amber Warrick
Investing.com– The dollar climbed above $20,000 on Friday as cryptocurrency markets followed a broader rally in riskier assets as the dollar retreated from 20-year highs.
It jumped nearly 6% to $20,455.4 at 01:23 ET (0523 GMT), also recovering near its 2022 low. The token was expected to add more than 6% this week
This has pushed the total crypto market capitalization back slightly above the $1 trillion mark.
Bitcoin’s recovery has largely been fueled by weakness, easing from a 20-year high earlier in the week. Treasury yield easing, combined with a big-expected rate hike, helped pull the rug out from under the dollar.
Other cryptocurrencies also rose. The second crypto rose 4.4% to $1,704 in more than three weeks, while several other smaller altcoins also rose.
In anticipation of its upcoming move to a proof-of-stake model, Ethereum has largely outperformed its crypto peers over the past month. This change, called “consolidation”, will see mining the token abandoned in favor of staking, which will significantly reduce its electricity consumption and potentially make it more accessible.
But as crypto markets appear to be rallying, investors fear a quick turnaround in fortunes in the short term.
Federal Reserve Chairman Jerome Powell said Thursday that the bank is going to fight inflation. His comments saw traders raise their expectations from the Fed later this month.
Rising interest rates are behind crypto’s steep losses this year as the Fed unwinds two years of ultra-loose monetary policy.
Other major central banks also raise interest rates, limiting the possibility of a major crypto rally in the near term.