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Cryptocurrency update: Bitcoin climbed more than 10% this week

Cryptocurrency value rose this week, despite the fact that US equities briefly retreated from their new year rally and a major crypto lender filed for bankruptcy.

According to Coin Metrics, Bitcoin was last up about 12% for the week, while ether has increased by 14%. In comparison, two of the three major stock indices were on track to post a losing week, despite the fact that the week had been shortened for the Martin Luther King holiday.

Cryptocurrency Value

The S&P 500 and Dow Jones Industrial Average were last down 0.9% and 2.9% for the week, respectively. The Nasdaq Composite, on the other hand, has outperformed. It’s up slightly this week and is up 5% for the year, outperforming the other major indices.

During the same four-day period, bitcoin and ether gained 2.73% and 2.15%, respectively.

Crypto-related stocks benefited from Friday’s rally as well: exchange Coinbase (COIN) recently gained 10%, while bitcoin miner Marathon Digital Holdings (MARA) gained 9%.

Traditional markets rose as well, with the S&P 500 index rising 1.9% as investors digested a flurry of mixed earnings reports from major banks.

The producer price index (PPI) fell more than expected this week, indicating that the U.S. The Federal Reserve’s monetary hawkishness has kept inflation under control, which has boosted investors. According to the CME FedWatch tool, traders currently see a 97% chance that the Federal Open Market Committee (FOMC) will raise rates by only 25 basis points (0.25 percentage points) at its next meeting in February, a slowing from the December meeting’s 50 basis-point hikes.

While recent macro data – “including a modest pullback in inflation, downwards-trending wage and employment data, and a seemingly weaker dollar” – have induced some market relief, Sheraz Ahmed, managing partner at STORM Partners, told CoinDesk that how the Fed handles monetary policy while balancing economic data and recession fears will have a big impact on the market overall.

“Bitcoin seems to be trading along with the Nasdaq and risk assets again, after the past months of decoupling,” said Sylvia Jablonski, CEO, and chief investment officer at Defiance ETFs. 

Read more: Forex update: US Dollar is building on the previous recovery while gold price pulled back from the highest levels

Bitcoin Market Price

Cryptocurrency-Business-Newsbreak
Cryptocurrency value rose this week, despite the fact that US equities briefly retreated from their new year rally and a major crypto lender filed for bankruptcy.

Through most of 2022, bitcoin traded in lockstep with stocks as institutional investors who entered the crypto market the previous year, government stimulus, and Federal Reserve monetary policy tightening became the primary drivers of price.

However, by the end of the year, that correlation had faded, and bitcoin’s price had remained relatively stable despite a wave of scandals and bankruptcies in the crypto industry, as well as a general loss of confidence in the asset class.

This week’s rise in crypto prices coincides with the latest blow to the industry: Genesis, one of the largest crypto lenders and one of FTX’s largest unsecured creditors, filed for bankruptcy late Thursday evening.

According to Owen Lau, an analyst at Oppenheimer, crypto’s rise this week was a continuation of the rally in risk assets that occurred in the first two weeks of the year.

Buyers and others are still wondering what potential second and third order knock on effects the current blowups may have.

“Post-rally euphoria is always a great feeling but it should be treated with caution to avoid mistakes whether prices continue to rise or fall,” Ahmed said.

Read more: Marvel fans in China are overjoyed that the ban on movies has been lifted

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