Bitcoin is currently trading at $23,336.
Cryptoverse: Bitcoin beats the heat in a jumpin’ July. It’s been a good month for bitcoin – and we haven’t said that for a while.
After months of freefall, it jumped more than 17% in July, its best performance since October. Ether rose 57%, its strongest monthly gain since January 2021.
The rally was in step with gains of riskier assets such as stocks as investors bet that economic weakness could deter the Fed from aggressively tightening monetary policy.
Bitcoin’s 40-day correlation to the tech-focused Nasdaq (.IXIC) now stands at 0.90 – up from 0.41 in January – where 1 means their prices move in perfect lockstep.
The leading cryptocurrency has been consistently positively correlated with the Nasdaq since late November, unlike in previous years where it would routinely turn negative, meaning they moved in opposite directions.
More From FactFile: Bitcoin rises 5.11% to $23564.93
Itai Avneri, deputy CEO at cryptocurrency trading platform INX, described July’s convergence as “good news”.
“It means institutional investors are looking at bitcoin like any other asset,” he said. “When the market turns – and it will turn – these institutions will come back and invest in crypto.”
Gains were not limited to bitcoin, as the value of the global cryptocurrency market crept back above $1.15 trillion last month, adding over $255 billion since the end of June, CoinGecko data showed.
Assets under management in digital asset investment products rose 16.9% to $25.9 billion in July, reversing June’s decline of 36.8%, according to research firm CryptoCompare.
However, trading has been thin – indicating plenty of investors gauge it’s too early to turn bullish in a deeply uncertain macro backdrop with inflation rampant, and America and Europe staring down the barrel of a recession, not to mention the implosion of some big crypto players.
Average daily volumes across all digital asset investment products fell by 44.6% to $122 million, the lowest since September 2020, CryptoCompare found.
“On a medium-term horizon, we’re bearish (on crypto) despite the current bounce, this aligns with our stance on equities,” researchers at MacroHive wrote on Friday, citing inflation, recession risks and rate hikes.
