(Bloomberg) — Bitcoin is on track for its best weekly gain since October last year, helped by a return to risk appetite in global markets more broadly.
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The largest cryptocurrency by market capitalization was up more than 13% for the week through 10:33 a.m. Friday in London. It gave up some gains after briefly trading above $22,000 as news of the murder of former Japanese Prime Minister Shinzo Abe sparked a stock market pullback.
Read more: US Index Futures Slide; Abe’s death shocks traders: Markets recap
Other tokens like Ether, Avalanche, and Solana have also seen strong gains in recent days, helping bring the overall cryptocurrency market value to nearly $1 trillion, according to data from CoinGecko.
A stock market rally brings much-needed relief to virtual coins battered amid the positive correlation between the two asset classes. Bitcoin remains more than 50% lower in 2022, hurt by monetary tightening and a series of blowouts in a digital asset sector that continues to sober after overusing leverage.
“Risk markets are up across the board” and so “it’s no surprise that crypto is trading higher,” said Ben McMillan, Chief Investment Officer at IDX Digital Assets. “After a cascade of bad news and big selloffs, many crypto investors are still sitting on the sidelines waiting for the next shoe to drop.”
A barrage of economic risk and the threat of further deleveraging remain a concern in crypto. The news that clients of bankruptcy broker Voyager Digital Ltd. likely won’t get all their money back has instilled a new kind of fear in investors who have typically been able to withstand steep market declines.
“Many institutional bitcoin holders may be particularly sensitive to the general way the economy is moving,” said Jared Madfes, partner at Tribe Capital.
If Friday’s U.S. jobs report “comes back really low, inflation comes back even worse, and it looks like a number of geopolitical issues that are influencing the prices of a number of those assets in the basic economics aren’t improving, I can’t imagine that’s short-term bullish for Bitcoin,” Madfes said.
(Updates with the latest Bitcoin movement in the second paragraph.)
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