Bitcoin hit a two-week high on Saturday, extending strong gains from the previous session as cryptocurrencies benefited from a pick-up in risk appetite and a rally in stock markets.
Mimicking the stock market, Bitcoin hit a two-week high on Saturday, extending strong gains from the previous session.
The world’s largest cryptocurrency hit $41,983 (approximately 31.33,700 rupees), pushing Thursday’s lows close to 16% and marking a 27% increase from the year’s low of $32,950.72 (about Rs. 24.59,500) on January 24.
Ether, the coin linked to the Ethereum blockchain network, hit the $3,000 level (around Rs 2.23,900) for the first time since January 21
Friday’s 11% plus was the biggest single-day gain for bitcoin since mid-June, and the first major rebound after weeks of turbulence, along with tech and growth stocks, on fears of faster-than-expected Fed rate hikes to curb a surge in inflation.
That was accompanied by a rally in U.S. stocks, the tech-heavy Nasdaq ending the week with gains despite high earnings volatility, including robust growth at Amazon and disappointing results from owner Meta Platforms Inc. from Facebook.
These synchronized moves showed how bitcoin has become a much more mainstream asset, rocked by swings in risk appetite.
“The current panic and volatility surrounding bitcoin is based on a fundamental misunderstanding of it as an asset class,” said Ed Hindi, chief investment officer of Swiss-based cryptocurrency hedgefund Tyr Capital.
“When Nasdaq valuations fall, ill-advised institutional investors begin mass liquidating bitcoin positions as if it were a tech stock.”
The rally in stocks boosted other listed crypto assets on Friday, with miner Riot Blockchain getting a bump after reporting bitcoin production more than doubled in January from a year earlier.
Marathon Digital Holdings rallied after reporting an increase in bitcoin production, as did crypto exchange Coinbase Global, which rose more than 7%.
The 2022-23 budget clarified the taxation of virtual digital assets and proposed to impose a 30% tax on gains made on these transactions, in addition to subjecting crypto transactions, above a threshold, to 1% of TDS.
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