Bitcoin rose again above the $70,000 level and achieved gains for the fifth consecutive session, reflecting greater confidence in global markets about the possibility of an interest rate cut by the Federal Reserve this year.
The largest cryptocurrency reached $70,530 as of 8:20 a.m. Wednesday in Singapore, its longest daily rally in three months. That’s about 5% below the previous record of $73,798 set in mid-March.
Traders are pricing in a greater likelihood of a Federal Reserve interest rate cut as soon as November, following data suggesting moderating U.S. inflation and a weak labor market. Some U.S. Treasuries posted their biggest two-day declines of the year, an easing of financial conditions that could help speculative assets such as cryptocurrencies.
“Crypto assets are responding positively to expectations of rate cuts,” Tom Couture, vice president of digital asset strategy at Fundstrat Global Advisors, said in a note.
Collective rise in currencies
The top five cryptocurrencies, including Ethereum, Binance Coin, and Solana, have all surged in the past 24 hours. Popular coins among retail investors, such as Dogecoin, have also surged in value.
Binance Coin is associated with the ecosystem surrounding Binance, the largest cryptocurrency exchange, and is often seen as a barometer of market sentiment.
CoinMarketCap data shows that Binance Coin is trading at around $695, higher than its previous all-time high of around $691 in 2021. Binance Coin’s more than 100% rise in value this year suggests improved perceptions of Binance’s prospects since last November, when the company pleaded guilty to violations of U.S. anti-money laundering and sanctions laws that included a historic $4.3 billion fine.
Optimism about the future of Bitcoin
Bitcoin has struggled to hold above $70,000 in recent days, but bulls are taking heart from investment inflows into U.S.-based crypto exchange-traded funds as well as moves in Washington toward a regulatory framework for cryptocurrencies.
The short-term 30-day correlation between Bitcoin and the Nasdaq 100 index of U.S. technology stocks is at its highest level since early 2023, suggesting that gains in the stock index could be accompanied by a rally in the leading cryptocurrency.
The U.S. monetary policy environment is more positive for digital assets and will likely help push bitcoin to a record $100,000 or even higher by the end of the year, Michael Novogratz, the billionaire founder and CEO of Galaxy Digital, said on Bloomberg TV.
Such sentiments are an indication of how the bad memories and scandals that have dogged the digital asset market in 2022, including the scam that led to the collapse of the giant cryptocurrency exchange FTX, are fading, at least for now.
