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Cryptocurrency prices experienced a rebound on Friday after two days of declines, reflecting a broader recovery in risk assets. Bitcoin saw a 4.7% increase, reaching $67,799.17, while ether rose 4.5% to $3,262.76, according to Coin Metrics.
This rise follows a turbulent week for equities, with the tech-heavy Nasdaq Composite and the S&P 500 both enduring their worst single trading day since 2022. Notable gains were observed in crypto-related stocks, with Coinbase and MicroStrategy jumping 4% and 9%, respectively.
Bitcoin’s recovery was buoyed by data showing a slight easing in inflation, as indicated by the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index. This data has increased speculation about a potential interest rate cut in September.
Investor attention is also on the Bitcoin Conference in Nashville, where former President Donald Trump is scheduled to speak. Trump’s pro-crypto stance is anticipated to positively influence cryptocurrency prices.
Despite the bounce-back on Friday, bitcoin’s weekly performance remains relatively flat, and ether is poised to end the week with a 7% loss. The week’s sell-off in tech stocks, exacerbated by disappointing earnings reports from Alphabet and Tesla, led to a rotation out of risk assets, including cryptocurrencies.
Additionally, bitcoin has faced selling pressure due to ongoing Mt. Gox repayment distributions, while ether’s price has been impacted by significant outflows from the newly launched Grayscale Ethereum Trust (ETHE), contrasting with inflows in other funds.