Cryptocurrencies like Bitcoin are on the rise, following the positive trend in stock markets. The good earnings report from Nvidia and the outlook for interest rates are boosting the mood. Bitcoin’s price has gone up 2% in the past 24 hours to around $26,500. That’s a comfortable increase from its recent low point below $25,500, which it hit during a sell-off last week. This sell-off broke a streak of low volatility in the crypto market.
Bitcoin has been known to move in sync with the tech-heavy Nasdaq 100 stock index. The Nasdaq, along with the Dow Jones Industrial Average and S&P 500, is expected to surge, which usually gives a lift to cryptocurrencies as well. Nvidia’s impressive performance has contributed to the positive mood. The company’s strong results have excited investors, especially those interested in artificial intelligence.
Apart from Nvidia, the overall risk sentiment in the market is improving as bond yields fall from their recent highs. This is a bigger trend that affects cryptocurrencies too. Treasury yields went up recently, impacting Bitcoin, as people expected the Federal Reserve to keep interest rates high to fight inflation and maintain a strong economy. However, these higher rates can be a challenge for cryptocurrencies and tech stocks. When safer investments like Treasuries offer good returns, people are less likely to invest in riskier assets like Bitcoin.
But recently, yields have gone down, with the benchmark 10-year U.S. Treasury yield dropping to 4.18% from its peak of 4.35% earlier this week. This drop is due to concerns about a possible economic slowdown caused by the Fed’s efforts to control inflation. People are speculating that central banks might delay their rate hikes, which has led to a rally in the market.
Apart from Bitcoin, other cryptocurrencies are also on the rise. Ether, the second-largest cryptocurrency, increased by 2% to around $1,675. Smaller cryptocurrencies, also known as altcoins, are doing well too. For instance, Cardano went up by 3% and Polygon saw a 1% increase. However, meme-based coins like Dogecoin and Shiba Inu have had more modest gains, each going up by less than 1%.
