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Bitcoin prices rise while stocks decline. This is good news for cryptos.



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Bitcoin prices remain in the dumps after crypto’s worst quarter since 2011, a year in which it broke $1 for the first time.

Martin Burroughs / AFP via Getty Images

Bitcoin and other cryptocurrencies were relatively resilient on Thursday, which were under pressure, stagnant or rising in contrast to the stock market. This marks a departure for digital assets, which have shown themselves to be correlated to stocks and vulnerable to becoming even more negative.

The price of bitcoin has risen by less than 1% to $19,800 in the past 24 hours. The biggest crypto fell on Wednesday with shares touching $19,150, but has since rebounded to levels seen earlier in the week. Bitcoin continues to struggle to consolidate above the key $20,000 mark, reaching a high of $22,000 over a week ago before falling back.

“Bitcoin is showing some signs of stabilization, but sellers are keenly watching whether June lows will hold,” said Edward Moya, analyst at broker Oanda. Bitcoin found itself in a selloff trough below $18,000 in mid-June, and this week analysts have been watching as technical indicators suggest a further drop to $18,000 – or even below – is in the cards.

What makes bitcoin’s flexibility impressive is that the stock market is not the same size. Stock indices closed lower on Wednesday and futures for the S&P 500 and Nasdaq indicate that more of the same pain is to come on Thursday. Bitcoin and its peers should theoretically trade independently of mainstream finance, but over the past year has been shown to be largely correlated with stocks, and especially tech stocks.

The latest fall in stocks came on Wednesday in the wake of inflation data that triggered a return to bearish fears after the US consumer price index for June climbed 9.1% annually, marking the fastest growth in 40 years and ahead of expectations. .

With inflation still running red-hot, investors worry that the Federal Reserve will be unable to avoid a recession as it grapples with higher prices by raising interest rates, denting economic demand. And a recession will be a merciless environment for riskier bets like bitcoin and other cryptos.

But the digital asset is already in the dumps. Bitcoin continues to trade at less than a third of its all-time high since November 2021 and has endured its worst quarter in more than 10 years. The rift in the crypto industry, along with macro factors, has accelerated price declines, including the downturn of stablecoin Terra and the failure of hedge fund Three Arrows Capital.

On Thursday, crypto lender Celsius Network announced that it had filed for Chapter 11 bankruptcy as it seeks restructuring. Celsius, which at one time offered yields of around 20% on crypto deposits, halted customer withdrawals, swaps and transfers last month as its business model came under pressure in the wake of falling digital asset prices.

Fund manager Steve Clayton said, “Token prices are generally strong this morning, despite the news that Celsius, a leading provider of crypto banking services, has filed for bankruptcy in the states, potentially threatening hundreds of thousands of crypto investors. The deposit amount has been put at risk.” Hargreaves in Lansdowne.

Ether, the second-largest cryptocurrency, gained 2% to nearly $1,100. Altcoins, or smaller cryptos, were more mixed, with Solana rising 1% and Cardano falling 1%. Memecoin was also weak, with Dogecoin down 2% and the Shiba Inu 1% in the red.

Write to Jack Denton at [email protected]




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