Bitcoin and other cryptocurrencies rebounded Friday as investors bought the dip in hopes that the market had bottomed out after a brutal week.
The world’s most popular cryptocurrency, Bitcoin, was up 5.8% over the previous 24 hours at $30,600 as of late Friday morning, while Ethereum gained 8.0% to trade at $2,110.
Smaller cryptocurrencies notched even bigger gains. Solana surged 23.3% to $55.62 and XRP was up 19.8% at $0.45.
“I think we’ve seen the bottom in prices for most cryptos,” Marc van der Chijs of First Block Capital told The Post.
Despite Friday’s bump, most cryptocurrencies are still trading at mere fractions of their all-time highs. Rising interest rates and investor doom-and-gloom about a potential recession have battered risky assets in recent weeks.
Van der Chijs said that this week’s crash — which saw bitcoin trade as low as $25,400 on Thursday — was due to market-wide turmoil as well as a perfect storm of crypto-specific factors, including the implosion of so-called “stablecoin” TerraUSD and a series of margin calls that forced crypto investors to sell off their bitcoin stakes.
The investor and consultant said retail traders are now buying into smaller cryptocurrencies like Dogecoin — which is up 13.3% over the past 24 hours — while larger investors are pouring into heavily discounted bitcoin.
“If you look at bitcoin, it’s mainly big institutions buying,” he said.
Even after Friday morning’s surge, bitcoin was down 9.6% over the previous five days and 35.6% so far this year.
David Sacco, a finance professor at the University of New Haven and an ex-UBS investment banker, also said that bitcoin had likely already seen the bottom this week.
“If I had to bet, I would bet you that we’ll see bitcoin hit $40,000 before we see it break $20,000,” he said.
Sacco and other analysts say that the cryptocurrency market is becoming increasingly tied to technology stocks.
If the tech-heavy Nasdaq Composite Index — which is down 25% so far this year — were to drop an additional 10%, bitcoin would likely drop at least below the recent record low of $25,400, Sacco predicted.
Garrick Hileman, research chief at Blockchain.com, also told The Post that Friday’s crypto bump was likely correlated with a rebound in tech stocks. Big Tech stocks rallied on Friday, with Google trading up 3.5%, Apple 3.4% and Amazon 4.0%.
Shares of Coinbase, the only major publicly traded cryptocurrency exchange, surged 18.8% on Friday morning to $69.64 — although the stock is still down an eye-watering 72% so far this year.
“Value investors are starting to have a look at crypto, with companies like Coinbase trading at comparatively low price-earnings ratios relative to comparable companies,” Hileman said.
As cryptocurrencies have cratered in recent months, blockchain-based NFT collectibles have also taken a beating.
The market values for NFTs in the ultra-hyped Bored Ape Yacht Club series, which has earned endorsements from celebrities like Jimmy Fallon and Future, has plunged in recent weeks, according to data from crypto news site the Block.
The Bored Ape Yacht club’s floor price — a measure of how much the cheapest NFT in the collection is selling for — fell by 25% in the week leading up to Thursday, the Block reported.
And overall NFT daily trading volume has plunged by more than 90% since its peak in September, data from industry tracking site NonFungible shows.
Sacco predicted that some NFTs may retain their value in the long term in a similar manner to fine art — but that investors should be wary of most offerings.
“The vast majority of NFTs are worthless,” he said.
[Written in collaboration with other media outlets with information from the following sources]
