The crypto has been going parabolic as of late, more than 17% to the tune of $28,220. The gains have retreated back down to the stratosphere since then, but the price is still far above the level on Friday afternoon. By mid-afternoon on Monday, it was just 3.8% below its high.
This time, it’s pretty unclear why Bitcoin doubled-down on its holiday rally, but the price has been moving in lockstep with riskier assets. That means that when investors are willing to bear more risk for higher returns, they’ll gobble up Bitcoin. The Repo Market: Get In On The Joke
Bitcoin hit rock bottom for the year on March 12, less than two weeks before the global stock market reached its low as the pandy ensued. Since then, Bitcoin is up more than 450%, while the S&P 500 has risen 67% from the low point it reached on March 23.
Since mid March, the U.S. Dollar Index [$DXY], an alternative for interest in safe, dollar-denominated assets among international investors, has dipped 12% as the global economy has recovered. In mid March, the Fed announced it would provide as much monetary stimulus as needed for the U.S. economy, which lowered interest rates and led to expectations they would remain at rock bottom. How The Panic of 1907 Ushered in The Federal Reserve
Yields on long-term Treasury bonds are now below the expected rate of inflation, reducing interest in that debt, as well as in the dollars needed to buy it. Investors have moved into riskier assets, including Bitcoin, in search of higher returns.
Since the stock-market closed on December 22, the date that marked the end of a short pause in the stock rally, the S&P 500 is up a tenth of a percent. Treasury prices are down since then, with the 10-year Treasury yield up to 0.94% from 0.92%. The Dollar Index is down 0.3%. SEC Comes Down on XRP