(Bloomberg) – Bitcoin reached a two-week high with the return of risky sentiment after sales in more speculative sectors of the financial market.
The token rose up 5.7% before cutting some gains to trade at $ 54,400 starting at 10:29 am in New York. Ether – the second largest cryptocurrency in the world – grew 3.8%. The gains reflect broader risk optimism, with the Nasdaq 100 index recovering from a decline on Monday that pushed the technology index to the so-called correction level.
“Bitcoin is unlikely to be a big ‘escape to security’ move going any further,” said Matt Maley, chief market strategist at Miller Tabak + Co. in a note on Tuesday. “Instead, we feel it is more of a ‘linked risk / risk’ move. Therefore, if we observe a deeper decline in the stock market, we think that Bitcoin is likely to have a decent decline.
Maley noted, however, that the largest cryptocurrency in the world held “very well” during the recent Nasdaq correction, adding that this could “have been due to the fact that the S&P 500 also held up very well … if the SPX start rolling in the same way that Nasdaq did recently, Bitcoin will finally decrease materially as well, ”said Maley.
Even with ambitious bets like Tesla Inc. and the ARK Innovation ETF, Bitcoin prices were driven by more institutional adoption news, fueling the cryptographic proponent’s argument that large financial players are rushing to gain exposure to the token, while another point in view, the digital asset is a bubble fed by stimuli destined to burst as its 2017-2018 expansion and retraction cycle.
On Monday, NYDIG, a provider of financial services related to Bitcoin, announced that it has raised $ 200 million from investors, including Stone Ridge Holdings Group, Morgan Stanley, New York Life, MassMutual and Soros Fund Management. NYDIG said Bitcoin adoption among institutions is accelerating, citing data that insurers have more than $ 1 billion in Bitcoin-related exposure on their platform.
“Bitcoin and Ethereum optimism is back as more money bets continue to flow into cryptocurrencies,” wrote Edward Moya, senior market analyst at Oanda, in an email. “The institutional interest still looks strong.”
The narrative that long-term investors such as family offices, insurance companies and corporate treasurers are increasing exposure to tokens is controversial, but is gaining momentum. Goldman Sachs Group Inc. recently said it is seeing substantial demand from institutions as it works to restart its cryptocurrency trading desk.
Technical analysis also supports higher prices, according to a report by Evercore ISI strategist Rich Ross, who said that Bitcoin could reach $ 75,000.
In the past few days, oil billionaire Kjell Inge Rokke has spoken out in favor of Bitcoin and Rokke’s Aker ASA is opening a new business to explore its potential.
“Bitcoin can still reach zero. But it can also become the nucleus of a new monetary architecture, ”wrote Rokke, Norway’s second-richest person, with an estimated net worth of $ 5.4 billion, in a letter to shareholders. He says it is not inconceivable that a Bitcoin could one day “be worth millions of dollars”.
Billionaire Rokke bets that bitcoin will be on the right side of history
For more articles like this, visit us at bloomberg.com
Subscribe now to stay up to date with the most trusted business news source.
© 2021 Bloomberg LP