Bitcoin jumps more than 10% as risk appetite ramps up on a pullback in the US dollar from 20-year highs
- Bitcoin surged as much as 13% on Friday to trade above $21,000 for the first time in two weeks.
- Crypto prices advanced alongside a jump in US stocks that put the S&P 500 on track to break a string of weekly losses.
Bitcoin leapt to a two-week high Friday as a drop in the strong US dollar helped fuel a jump in stocks and other risk assets.
Bitcoin gained as much as 13% to $21,375.38, the first time the price has topped $21,000 since August 26. The rise was later pared to 11%.
The bounce took place as US stocks advanced, pushing the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average toward breaking a three-week long losing streak. The tech-rich Nasdaq was up more than 2% during the session.
"Bitcoin is welcoming the return of risk appetite and a falling US dollar. The broad market rally has rejuvenated cryptos and that could continue if investors continue to look beyond hawkish central bank overtures and lingering recession risks," Edward Moya, senior market analyst at Oanda, said in a Friday note.
The US Dollar Index fell 0.7% to 108.36, its weakest level in more than a week. The index that measures the greenback's performance against six currencies recently hit fresh 20-year highs beyond 110. The dollar has been advancing as Federal Reserve officials prepare investors for a potential rate hike of 75 basis points later this month, the third consecutive increase of that size, as the central bank works to cool down hot inflation.
Ether, which runs on the Ethereum network, rose as much as 6% to top $1,700 for the first time since August 25. Solana moved 4.2% higher, and cardano picked up 2%.
Users of the Ethereum network are gearing up for the Ethereum Merge, a network update scheduled to take place on September 13 through 15. The upgrade is aimed at making the blockchain technology — known for running smart contracts — more efficient and less costly for transactions.
Price gains for cryptocurrencies pushed the value of the cryptocurrency market back above $1 trillion this week. The market cap dropped from more than $3 trillion in November 2021 after a months-long, so-called crypto winter.
Elsewhere on the crypto front, Sam Bankman-Fried's crypto trading platform FTX said Friday it will acquire a 30% stake in SkyBridge Capital. The investment firm run by Anthony Scaramucci will use a portion of the funds to purchase $40 million in cryptocurrencies to hold on its corporate balance sheet as a long-term investment. Financial terms of the deal weren't disclosed.