Bitcoin
and other cryptocurrencies were rising Thursday, looking to follow stocks higher amid an upbeat mood for risk-sensitive assets. Blowout earnings from Nvidia have brightened the mood as has the outlook for interest rates.
The price of Bitcoin has advanced 2% over the past 24 hours to $26,500. The largest digital asset now remains comfortably above its recent trough below $25,500—the lowest levels since mid-June—hit in a selloff late last week which snapped a streak of historically low volatility across cryptos.
Bitcoin has shown in the past to be correlated to the technology stock-heavy
Nasdaq 100
stock index, which—alongside the
Dow Jones Industrial Average
and
S&P 500
—was poised to surge on Thursday, likely giving cryptos a lift. To thank for the mood are, in part, “beat and raise” results late Wednesday from chip maker
Nvidia
(ticker: NVDA), which continues to lead equities and especially tech stocks higher amid an investor frenzy over artificial intelligence.
“Nvidia smashing the forecast ceiling has also lifted the mood elsewhere,” said Sophie Lund-Yates, an analyst at broker
Hargreaves Lansdown.
But it’s not just Nvidia. Risk sentiment is picking up speed amid a fall in bond yields from multi-decade highs—a more macro trend that is particularly important for cryptos.
Treasury yields have surged in recent weeks, hitting Bitcoin, amid expectations that a commitment to fighting inflation and a strong economy will encourage the Federal Reserve to keep interest rates at generational highs for longer than once thought. Higher rates and yields weigh heavily on cryptos and tech stocks—and were a key force driving the selloff in Bitcoin last year—because when investors can earn a cool 5% on risk-free Treasuries, there is less incentive to pile into riskier bets like Bitcoin.
However, yields have slipped back across the curve, with the yield on the benchmark 10-year U.S. Treasury falling to 4.18% on Thursday after topping 4.35%—the highest levels since 2007—earlier in the week. Growing fears of a “hard landing”—that the Fed cannot bring inflation under control without causing an economic slowdown—amid a spate of downbeat economic data have been pressuring yields. This has, in turn, spurred bets that the Fed will be more accommodative.
“Concerns about a hard landing gathered pace over the last 24 hours, which triggered a major rally as speculation mounted that central banks might press pause on their rate hikes,” said Henry Allen, an analyst at Deutsche Bank.
Beyond Bitcoin,
Ether
—the second-largest token—rose 2% to $1,675. Smaller cryptos or altcoins were also buoyant, with
Cardano
climbing 3% and
Polygon
ticking 1% higher. Memecoins were more muted, with
Dogecoin
and
Shiba Inu
each gaining less than 1%.
Write to Jack Denton at [email protected]
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