Bitcoin, the first cryptocurrency, has been the subject of debate and speculation since its inception in 2009. Originally a niche electronic currency, it is now a major financial asset with ups and downs.
After the world’s largest cryptocurrency by market capitalization surged nearly 4% to nearly $26,800 on Wednesday and held above $26,000 for 24 hours, Bitcoin was still hovering around $26,100 on Thursday morning.
The whole market capitalization of all cryptocurrencies, around $1.06 trillion, showed a 1% increase day over day. The rally in the cryptocurrency market mirrors a rise in the stock market, with the S&P 500 1% also up about and the 2% NASDAQ up.
Bitcoin’s Recent Price Moves Follow a Surprising Stability
Analysts attributed the Bitcoin price rise to poor PMI (Purchasing Managers’ Index) numbers, an indicator of economic trends in the manufacturing and service industries.
According to James Butterfill, head of research at CoinShares, a European alternative asset manager, the lower PMI numbers indicated a market contraction, which promises well for a slowdown in inflation and suggests a lower probability of a rate hike in September.
Joel Kruger, market strategist at LMAX Electronic, a crypto exchange for institutional echoed Butterfill’s analysis indicating that the main basic catalyst for the upward movement is coming from the traditional markets. That will be like fortune in an email. Taking into account the rally in stocks and the sell-off in the U.S. dollar, Bitcoin was able to benefit. This is shown in the Bitcoin price chart over the past 24 hours published by Noticias Blockchain.
Bitcoin Price Ups and Downs
Bitcoin’s price rally follows a precipitate drop last week in which it fell nearly 8%, dragging the rest of the cryptocurrency market down with it. Bitcoin’s recent price ups and downs also come during a period of relative stability for the historically volatile asset. Its 90-day volatility rate was recently the lowest since 2016.
Those reasonably calm waters contrasted with Bitcoin’s price surge throughout 2023. January was a period in which Bitcoin price was less than $17,000, but in the midst of the March banking crisis that brought down Silicon Valley Bank, Bitcoin surged to nearly $28,000.
After stagnating for two months, the digital asset soared to over $31,000 following BlackRock’s application for a Bitcoin spot ETF, a move that many saw as a resounding sign of approval for the cryptocurrency, given that BlackRock, the world’s largest asset manager, is a titan in the financial industry.
CoinShares’ Butterfill explained that the main reason there haven’t been significant price increases even with real economic prospect and favorable valuation metrics is because investors are currently in a holding pattern, awaiting the SEC’s verdict on the approval of a U.S. spot ETF.
Bearing in mind what has been explained, there is hope on the fact Bitcoin remains bullish in both the short and long term. While it is undoubtedly a unpredictable electronic asset, it has a long history of outperforming the market going back nearly a decade.
By Audy Castañeda
