On Friday, the cryptocurrency market experienced a significant rebound after facing two consecutive days of declines, as investors rotated out of risk assets. This shift in sentiment was particularly evident in the performance of major cryptocurrencies such as Bitcoin and Ether. Bitcoin surged by 4.5%, reaching $67,720.83, as reported by Coin Metrics. Ether also saw a notable increase, advancing 4% to $3,248.25. This uptick in cryptocurrency prices marked a recovery from earlier losses.
The resurgence in crypto prices came amid a broader rally in equities, particularly in the tech-heavy Nasdaq Composite and the broad-market S&P 500. These indices had suffered their worst single trading day since 2022 earlier in the week, but on Friday, they staged a notable rebound. This positive movement was reflected in the performance of individual stocks as well. For example, shares of Coinbase, a major cryptocurrency exchange, jumped by 7%, while MicroStrategy, known for its significant Bitcoin holdings, saw a 10% increase.
One of the key drivers behind the rebound in cryptocurrency prices was the latest data on the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index. The report indicated a slight easing in inflation for June compared to the previous year. This data supported the expectation that the Federal Reserve might implement an interest rate cut in September, which, in turn, buoyed investor sentiment toward risk assets, including cryptocurrencies.
In addition to the PCE data, investor focus was also on the Bitcoin Conference taking place in Nashville. Former President Donald Trump, who has recently positioned himself as a pro-crypto candidate in the upcoming election, is scheduled to speak at the conference on Saturday. Trump’s recent pro-crypto rhetoric has led to speculation that his remarks could provide a further boost to cryptocurrency prices in the near future.
Despite Friday’s gains, the broader weekly performance for cryptocurrencies remained mixed. Bitcoin’s price has remained relatively stable throughout the week, while Ether is poised to end the week with an 8% loss. The earlier decline in tech stocks, driven by disappointing quarterly earnings reports from major companies like Alphabet and Tesla, had led investors to shift away from risk assets, including cryptocurrencies.
Furthermore, the cryptocurrency market has been affected by ongoing developments related to the Mt. Gox repayment schedule. This process has resulted in increased selling pressure on Bitcoin as creditors liquidate their holdings. Additionally, the newly launched Grayscale Ethereum Trust (ETHE) has experienced significant outflows, putting downward pressure on Ether’s price compared to other funds that have seen inflows.
Overall, while Friday’s gains suggest a recovery in the cryptocurrency market, it remains influenced by a complex interplay of economic indicators, investor sentiment, and ongoing regulatory and institutional developments. The market’s reaction to these factors will likely continue to shape cryptocurrency prices in the coming weeks.