Bitcoin jumped the most since just after the exchange FTX sought protection from creditors a month ago, as a rally in US equities provided a respite for the battered digital-asset world.
(Bloomberg) — Bitcoin jumped the most since just after the exchange FTX sought protection from creditors a month ago, as a rally in US equities provided a respite for the battered digital-asset world.
The largest cryptocurrency by market value rose as much 4.6% to $17,961 on Tuesday, the biggest intraday increase since Nov. 14. Bitcoin is down about 16% since FTX ran into trouble in early November. Ether, Binance Coin, Solana and Avalanche also posted gains.
Bitcoin, which was originally championed as being unconnected with the traditional world of finance, has been trading mostly in lock-step for the past year with risk assets such as equities. US stocks soared on Tuesday after data showed prices rose less than forecast last month, cementing optimism the Federal Reserve will slow the pace of rate increases.
“It seems as if the most negative fallout of FTX/Alameda has already played out,” said Riyad Carey, a research analyst at crypto data firm Kaiko. That is “allowing tokens to react positively to good macro news.”
Cryptocurrencies have tumbled this as the Fed raises interest rates from the stimulus levels put in place during the Covid pandemic, which is prompting investors to pull back on risk exposure.
The pullback has helped to magnify the risk in the digital-asset market, such as the operations of FTX. Bitcoin has stumbled about 60% this year.
FTX founder Sam Bankman-Fried was charged Tuesday with eight criminal counts, including conspiracy and wire fraud for allegedly misusing billions of dollars in customers’ funds before the spectacular collapse of his cryptocurrency empire.
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