Cryptocurrencies advanced alongside US stocks, with Bitcoin posting its biggest two-day increase in about a month, as investors speculate central banks could soon pull back from aggressive interest-rate hikes.
Bitcoin, the largest digital coin by market value, rose as much as 4% on Tuesday to trade around $20,372, its highest since Sept 15. That’s in line with broader gains in US stocks. The S&P 500 posted its best two-day surge since April 2020.
Dogecoin gained as much as 10% to 66 cents. Tesla CEO Elon Musk, an ardent supporter of the token, revived his $44 billion bid for Twitter Inc. on Tuesday.
Bitcoin’s performance has correlated with the S&P 500 all year. “It’s very hard to find days where Bitcoin’s up and the markets aren’t up,” said Michael Purves, founder and CEO of Tallbacken Capital. He added that the opposite is also true: a decline in Bitcoin prices generally lines up with a decline in the equity markets.
However, Purves said the recent rally in crypto prices does not signal that more institutional investors are buying Bitcoin.
“This is just more of what we’ve seen,” he said. “Nasdaq up, equities up, dollar weaker, Bitcoin stronger.” – BLOOMBERG