After weeks of high volatility, the crypto market is on the rise, showing steady gains over the past week as Bitcoin breached US$44,000 for the first time since March 3.
Ethereum and Solana were among the biggest movers on Friday Asia time, each showing double-digit gains, while market leader Bitcoin is up almost 10%.
Cardano was one of the strongest performers this week, gaining almost 40% to trade at US$1.16 at press time — its highest point since early February. Ethereum Classic led the week with nearly 80% gains.
“Clearly, there’s been a sentiment shift in crypto markets,” Justin d’Anethan, institutional sales director at Amber Group, told Forkast. “How long it will last remains to be seen but, for now, investors are bolstered by positive news.”
In a major milestone for the industry, banking giant Goldman Sachs conducted its first over-the-counter crypto options trade on Monday, becoming the first major U.S. bank to do so.
Additionally, Terra founder Do Kwon announced it was planning on buying US$10 billion worth of Bitcoin for its reserves in its algorithmic stablecoin ecosystem.
“That kind of news impacts perception of the stability of the asset and the long-term view of it,” said Jonathon Miller. The Australian managing director of crypto exchange Kraken told Forkast that Bitcoin’s perception as a reserve asset is growing for both traditional and crypto companies.
Inflationary concerns remain in the market, Miller said, dismissing concerns Bitcoin had not been behaving as a hedge against this inflation in recent months.
“The hedge narrative for Bitcoin still remains true,” Miller said. “It may not have performed as strongly as some other like gold in the very, very short run. But in the medium to long run, Bitcoin is a very high-performing noncorrelated asset class.”
Macro markets have also begun to improve recently, d’Anethan told Forkast, as investors grow accustomed to the state of geopolitical tensions and the recently announced interest rate hikes from the U.S. Federal Reserve to combat inflation, raising the target range to 0.25% to 0.5%.
“It’s created a risk-on atmosphere where investors are happy to put capital to use rather than standing on the sidelines,” d’Anethan said. “And that definitely includes crypto allocation, both from retail and institutional players.”