Macroeconomic Factors Persist as Large Market Cap Prices Drop

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(as of 3:45 AM UTC, May 25, 2023) 

As Asia wakes this morning, large market cap cryptocurrency prices took a small nosedive in value, with Bitcoin (BTC) and Ethereum (ETH) dropping 3.72% and 3.56% respectively. On the BTSE marketplace however, PlayZap (PZP) tokens made the highest percentage gains out of any token, increasing by as much as 13.14%; however, POGAI made a move in the opposite direction, dropping by 30.94% in the day preceding.

Decreasing large market cap prices can be attributed to a number of factors, macroeconomic influences chief among them. April inflation data for the United Kingdom was released overnight, where data showed the highest level of core inflation the country has seen in as many as 28 years, at 6.8%. Although analysts believe such inflation has the potential to boost confidence in digital currencies like Bitcoin prices have continued to fall over the last 24 hours. 

The elephant in the room, the looming US debt default and debt ceiling issue, has continued without a solution in sight. While this continued problem is likely to have affected short-term investor sentiment, many analysts expect the resolution, or lack thereof, to have a far greater impact on prices.

A multitude of stock indexes saw similar drops in price, with the S&P 500 similarly dropping 0.7% in the last 24 hours. This correlation between traditional market stock asset prices and cryptocurrency prices can likely be attributed to the similar macroeconomic factors currently affecting them both, as inflation continues to present an issue, and we wait for US lawmakers to find a solution to the debt ceiling crisis. As always, time will tell. 

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