Bitcoin (BTC-USD) and ethereum (ETH-USD) in midday trading Tuesday have reached multi-week highs as risk assets catch a bid.
Bitcoin (BTC-USD +3.6%) is flirting with $43K and ethereum (ETH-USD +2.0%) is holding firmly above $3K key level. Both are up double-digit percentage points in the past week, though down YTD. Not surprisingly, speculators also appear to be expanding their risk appetite for U.S. stocks, with the S&P 500 (SP500) +1.1%, Dow Jones (DJI) +0.7% and Nasdaq (COMP.IND) +2%.
The upswings come a day after Federal Reserve Chair Jerome Powell’s hawkish remarks, saying the central bank will tighten its policy rate to above neutral if needed. Meanwhile, if bitcoin (BTC-USD) “breaks out past 45K while the Fed is ramping up hikes it’s impossible to be bearish short-term,” TD Ameritrade Network Lead Anchor Oliver Renick wrote in a Twitter post.
It seems that bond investors are pricing in Powell’s hint for the Fed to adopt a more aggressive interest-rate policy, with the 10-year U.S. Treasury yield (TLT) hitting its highest since May 2019, recently changing hands at 2.38%. The 2-year yield (SHY) also extends gains to 2.18%.
Despite its recent volatility, Bitcoin (BTC-USD) “is holding up nicely given the surge in Treasury yields,” Barron’s reported, citing OANDA analyst Edward Moya’s note written to clients. “Many crypto traders are nervous about how much money is on the exchanges, which could signal some investors are about to head to the sidelines.” Moya added that BTC could struggle to push higher from current levels, meaning “prices could be in for a rude awakening if the $40,000 level breaks.”
Some other digital tokens on the move include: binance coin (BNB-USD +2.2%), ripple (XRP-USD +3.2%), terra (LUNA-USD -2.9%), cardano (ADA-USD +7.7%), avalanche (AVAX-USD -1.8%), polkadot (DOT-USD +5.2%), dogecoin (DOGE-USD +3.6%), shiba inu (SHIB-USD +2.2%), polygon (MATIC-USD +2.7%), wrapped bitcoin (WBTC-USD +3.9%), litecoin (LTC-USD +5.1%), cosmos (ATOM-USD +1.2%) and near protocol (NEAR-USD +2.3%).
On Monday, Malaysia said it’s looking to adopt bitcoin and other cryptos as legal tender.
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