Bitcoin set for biggest weekly gain in nine months

Risk appetite returns with the largest cryptocurrency by market capitalisation up more than 13 per cent

Bitcoin is set for its biggest weekly gain since October last year. Reuters
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Bitcoin is on course for its best weekly gain since October last year, helped by a return of risk appetite in global markets more broadly.

The largest cryptocurrency by market capitalisation was up more than 13 per cent for the week on Friday morning — and if the move holds that would be the biggest gain for such a span since 2021. As of 11.10am UAE time on Friday, Bitcoin was up 6.98 per cent at $21,767.30.

Other tokens such as Ether, Avalanche and Solana have also had a strong run in recent days, helping to take the overall market value of cryptocurrencies back over $1 trillion, according to CoinGecko data.

A stocks rally is providing much-needed relief for battered virtual coins amid the positive correlation between the two asset classes. However, Bitcoin remains more than 50 per cent lower in 2022, hurt by monetary tightening and a string of blow-ups in a digital-asset sector that’s still sobering up after binging on leverage.

“Risk markets are up across the board” and thus “it’s not surprising that crypto is trading higher”, said Ben McMillan, chief investment officer at IDX Digital Assets. “After a cascade of bad news and large liquidations, many crypto investors are still sitting on the sidelines waiting for the next shoe to drop.”

A barrage of economic risks and the threat of more deleveraging remain a concern in cryptocurrencies. News that customers of bankrupt broker Voyager Digital likely won’t get all their money back has struck a new kind of fear into investors who have typically been able to stomach big market downturns.

“A lot of the institutional holders of Bitcoin may be particularly sensitive to the general way that the economy is moving,” said Jared Madfes, partner at Tribe Capital.

Updated: July 08, 2022, 7:15 AM