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, taking gains from Thursday’s lows to nearly 16%, and marking a 27% rise from the year’s low of $32,950.72 on Jan. 24.
Ether, the coin linked to the ethereum blockchain network, scaled the $3,000 level for the first time since Jan. 21.
Friday’s 11%-plus was the biggest single-day gain for bitcoin since mid-June, and the first major bounce after weeks of being rolled, 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 Inc’s disappointing results.
Those synchronized 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 7%.
(Reporting by Rachna Dhanrajani in Bengaluru and Vidya Ranganathan in Singapore; Additional reporting by Lisa Mattackal in Bengaluru; Editing by William Mallard)