Bitcoin and other cryptocurrencies rebounded on Friday as investors took a dip in hopes that the market had bottomed out after a brutal week.
The world’s most popular cryptocurrency, bitcoin, was up nearly 5% in the past 24 hours at $29,925 as of Friday afternoon, while Ethereum was trading up 6.5% at $2,051
Smaller cryptocurrencies made even bigger gains. Solana is up 23.3% to $55.62 and XRP is up 19.8% to $0.45.
“I think we’ve seen most crypto prices drop,” First Block Capital’s Mark van der Chijk told The Post.
Despite Friday’s bump, most cryptocurrencies are still trading at a fraction of their all-time high. Rising interest rates and investor doom and gloom about a potential recession have battered the riskier asset in recent weeks.
Van der Chijs said this week’s crash – in which bitcoin traded as low as $25,400 on Thursday – was due to market-wide turmoil as well as a perfect storm of crypto-specific factors, including so-called “stablecoins”. The explosion of TeraUSD was involved. And a series of margin calls that forced crypto investors to sell their bitcoin bets.
The investor and advisor said retail traders are now buying into smaller cryptocurrencies like Dogecoin – up 13.3% in the past 24 hours – while larger investors are pouring in heavily discounted bitcoin.
“If you look at bitcoin, it’s mainly large institutions that are buying,” he said.
Even after Friday’s surge, bitcoin was down 9.6% over the past 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 could already be looking down this week.
“If I had to bet, I can bet you that we will hit $40,000 before bitcoin breaks $20,000,” he said.
Sacco and other analysts say the cryptocurrency market is increasingly tied to technology stocks.
Sacco predicts that if the tech-heavy Nasdaq Composite Index — which is down 25% so far this year — is to drop an additional 10%, bitcoin could drop below its recent record low of at least $25,400.
Blockchain.com’s head of research, Garrick Hillman, also told The Post that Friday’s crypto bump was related to a rebound in tech stocks. Big tech shares rose on Friday, with Google trading up 3.5%, Apple 3.4% and Amazon up 4.0%.
Shares of Coinbase, the only major publicly traded cryptocurrency exchange, rose 18.8% to $69.64 on Friday morning — though the stock is down 72% so far this year.
“Value investors are starting to take a closer look at crypto, with companies like Coinbase trading at comparatively lower price-earnings ratios than comparable companies,” Hillman said.
Blockchain-based NFT collectibles have also taken a hit as cryptocurrencies have been rocked in recent months.
According to data from crypto news site The Block, the market cap for NFTs has plummeted in recent weeks, thanks to the much-hyped bored app Yacht Club chain that has garnered support from celebrities such as Jimmy Fallon and Future.
The floor price of Bored Ape Yacht Club – how much the cheapest NFTs in the collection are selling for – fell by 25% this week, Block reported.
And overall NFT daily trading volume is down more than 90% since its peak in September, shows data from industry tracking site NonFungible.
Sacco predicted that some NFTs could maintain their value similar to fine art over the long term – but investors should be wary of most offerings.
“The vast majority of NFTs are useless,” he said.