Crypto and stock prices skyrocketed on Thursday, which should be a welcome development for long-suffering investors.
The main digital currency, bitcoin, traded around $17,000, while ether is up 1.4% to change hands at $1,248. Several other altcoins were also trading higher yesterday, with Binance up 1.3% and XRP up 1.6%. Additionally, Polygon’s native token, MATIC, rose 1.3% Dogecoins up 0.8%. However, Polkadot’s DOT digital currency was a notable exception, slipping 0.3% amid an otherwise bullish session.
The US Dollar Index also fell on Thursday, slipping below 105 in trading, unsurprising given the broader crypto developments. The trend is not surprising as BTC traditionally strengthens when the US dollar weakens.
On Thursday, stocks also appeared to reverse the previous five days’ declines, with the S&P 500 rising 0.7%. The Nasdaq 100 was also up 0.9% early yesterday afternoon. The American cryptocurrency exchange coin base was among the top performers for the stock, climbing more than 3% to above $42.64. At the time, stock market action was threatening to make new lows, seeing the previous plunge to $41.23 on November 21st.
Other notable stock gains include cryptocurrency-focused platform Silvergate and MicroStrategy. Silvergate shares climbed 3.3% to $22.81 to break from two-year lows. Meanwhile, MicroStrategy’s stock was up 1.4% to change hands at $196.21. Multinational technology conglomerate Block also saw its shares rise 3.4% to $63.17.
However, not all crypto players were in the green during yesterday’s trading session. For example, the Grayscale product Bitcoin Trust (GBTC) fell at a 47% discount to net asset value (NAV).
Summary of recent interaction between cryptocurrency and stock prices
The recent overall surge in crypto and stock prices is a reversal from where it was just 48 hours ago. On Dec. 7, reports indicated that digital currency stocks had fallen again, although this did not signal a bearish reversal in digital assets.
Meanwhile, on Dec. 6, cryptocurrency prices surged while traditional markets and tech stocks suffered setbacks. Back then, bitcoin was trading at just over $17,000 while ether hit $1,266.
Once again, the US Dollar Index plunged due to rising cryptocurrency prices. The index has already given up 50% of its gains this year. Christopher Wong, currency strategist at Singapore-based Overseas Chinese Banking Corp, cited another reason for the sharp drop in dollar gains. China’s easing of Covid policies is also a causative factor, Wong said. As he said :
“The anticipation of China’s reopening and the calibration of the politics of the fed are key themes that should support risk proxies like commodity currencies. Last Friday’s strong nonfarm payrolls report only led to a rebound in the US dollar.”
Major traditional stock indexes suffered losses yesterday as investors waited for new tax data to find clues. At the time, the S&P 500 slipped 0.9% to 3,933.92, while the Nasdaq Composite lost 0.51% to 10,958.55. However, the Dow Jones Industrial Average (DJIA) gained 1.58 points to end the session at 33,597.92.