Bitcoin rose for a fifth consecutive day, the longest winning streak since September, as investors begin to re-embrace risk assets across global markets.
The largest cryptocurrency by market value gained as much as 5.8% to $44,110. XRP jumped as much as 17% to around 78 cents as so-called alt coins rallied more. Shiba Inu led memecoins higher, surging around 50% to around 0.000034 cents, according to CoinMarketCap.
Global markets have been whipsawed in recent weeks as investors contemplate the prospects of rapid monetary tightening. After reaching a record high of almost $69,000 in early November, Bitcoin lost as much as 50% of its value in what has been called a “crypto winter.”
The break above $43,000 could cause the current up move to target toward the $45,000 level, according to Nathan Batchelor, lead Bitcoin analyst for SIMETRI Research.
“People are starting to feel a little more comfortable dipping their toes back into some of these riskier asset classes after the pullback,” Lindsey Bell, chief markets and money strategist at Ally Financial Inc., said.
However, Bell says the market in general isn’t necessarily out of the water yet with lingering uncertainty on multiple fronts, including the speed at which the Federal Reserve and central banks could act to quell rising inflation.
A strengthening relationship between Bitcoin and the stock indices has emerged in recent months, particularly with the technology heavy Nasdaq 100 index. The correlation between the Nasdaq and Bitcoin currently stands at 0.43.
Gritt Trakulhoon, an investment analyst at Titan Global Capital Management USA Inc., said the dramatic rise in Shiba Inu could be attributed to development progress on a blockchain add-on, known as a layer-2 network, specifically designed for the token called Shibarium. The memecoin is based on the Ethereum blockchain.
“It doesn’t take a lot of effort to push them higher or lower,” Bell said. “Because Bitcoin is such a large market cap and more liquid than some of these other ones, in a way — it’s not necessarily stable — but it’s more stable than some of the other ones.”
© 2022 Bloomberg L.P.