Bitcoin hit its highest in two weeks on Saturday, extending the previous session’s strong gains as cryptocurrencies basked in a recovery in risk appetite and a rally in stock markets.
The world’s largest cryptocurrency hit $41,983 (roughly Rs. 31,33,700), taking gains from Thursday’s lows to nearly 16 percent, and marking a 27 percent rise from the year’s low of $32,950.72 (roughly Rs. 24,59,500) on January 24.
Ether, the coin linked to the Ethereum blockchain network, scaled the $3,000 (roughly Rs. 2,23,900) level for the first time since January 21.
Friday’s 11 percent-plus was the biggest single-day gain for Bitcoin since mid-June, and the first major bounce after weeks of being roiled, along with technology and growth stocks, by fears of faster-than-expected Fed rate hikes to curb a surge in inflation.
It came alongside a rally in US stocks, with the tech-heavy Nasdaq ending the week with gains despite the heavy volatility from earnings, including Amazon’s robust growth and Facebook-owner Meta Platforms’ disappointing results.
Those synchronised moves showed how Bitcoin has become far more of a mainstream asset, jolted by swings in risk-appetite.
“The current panic and volatility surrounding Bitcoin is based on a fundamental misunderstanding of it as an asset class,” said Ed Hindi, chief investment officer of Swiss-based cryptocurrency hedgefund Tyr Capital.
“When valuations on the Nasdaq fall, misguided institutional investors start liquidating Bitcoin positions en-masse as if it were a tech stock.”
The recovery in stocks boosted other listed crypto assets on Friday, with miner Riot Blockchain getting a bump after declaring Bitcoin production more than doubled in January from a year earlier.
Marathon Digital Holdings rallied after reporting Bitcoin production increased, as did crypto exchange Coinbase Global, which rose more than seven percent.
© Thomson Reuters 2022
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