After the tech-heavy Nasdaq Composite index climbed 1.3 percent on Monday, bitcoin and other cryptocurrencies soared on Tuesday, confirming the apparent link between digital assets and technology companies.
Over the last 24 hours, Bitcoin has risen more than 5% to almost $40,500. On Monday, the largest cryptocurrency’s price fell below $38,500, while it was trading as high as $43,000 late last week.
“Recently, commentators have remarked that bitcoin has been trading more like a tech stock than a cryptocurrency, with a high link to the Nasdaq,” Emile Phaneuf, an economist at crypto research firm Brave New Coin, said.
On Monday, the Nasdaq led U.S. stock indexes higher, with a late-day surge in tech companies helping the market as a whole turn around in the previous session.
“A combination of simultaneous upward and downward pressures on bitcoin’s price includes U.S. dollar holders looking for alternative assets during the highest inflation in decades; some buying after the American mid-April tax deadline passed; the war in Ukraine and the United States’ OFAC sanctioning of Russian bitcoin miners; and the ongoing uncertainty about whether the [Securities and Exchange Commission] might approve spot Bitcoin ETFs in the United States,” Phaneuf says.
Ether, Bitcoin’s smaller counterpart, has also risen, increasing nearly 7% to roughly $3,000. The Ethereum blockchain network’s underlying token plummeted as low as $2,800 on Monday, although it just reached $3,150.
Smaller cryptocurrencies known as “altcoins” were also gaining popularity. Solana and avalanche both increased by 6%, while cardano increased by 7%. Luna increased by 8%.
For “memecoins,” which were originally meant as online pranks rather than serious blockchain ventures, gains hit a whole new level. While the shiba inu grew by 8%, dogecoin increased by more than 30%.
Dogecoin, the cryptocurrency most closely linked with Tesla CEO Elon Musk (ticker: TSLA), was flying high after the billionaire agreed to acquire social media site Twitter (TWTR) for $54.20 per share.
The 10th-largest cryptocurrency by market capitalization, Dogecoin, has long been a favourite of Tesla CEO Elon Musk. Musk stated last month that he would not sell his dogecoin and would keep his bitcoin and ether holdings.
To read our blog on “Elon Musk tweeted that Tesla will take Dogecoin for its products” click here.
