BitcoinBTCUSD -1.73% capped a week of gains on Friday by reaching its highest price level in nine months, although not all cryptocurrency-related products emerged unscathed from the market’s turmoil.
At 5 p.m. on Friday, Bitcoin was trading at $26,791.16, up 8.46%, marking its highest 5 p.m. level since June. (It was trading at $27,460.70 early Saturday.) Ethereum and Dogecoin were up 5.1% and 7%, respectively. All three have traded higher each day this past week. Likewise, crypto exchange platform Coinbase Global COIN +10.62% (ticker: COIN) gained more than 37% over the past five days.
That may sound counterintuitive, given that the banking crisis was kicked off by the turmoil at Silicon Valley Bank and other crypto-friendly banks have closed their doors.
Indeed, many investors are nervous: As Barron’s reported, investors yanked some $255 million from investment products that hold digital assets this past week. Outflows came from both bullish and bearish funds, meaning that some may think that the worst of crypto’s punishment is over.
There certainly was plenty of pain to go around earlier this month, as Silvergate Bank’s demise preceded SVB’s; in that sense, investors may feel that cryptos have already been pummeled enough. Despite this past week’s rally, Bitcoin is still down nearly 40% over the past year and has fallen more than 63% from its record high in November 2021, when it reached $67,802.30.
Likewise, ongoing hopes for more lenient monetary policy tend to lift crypto, which flourished under the low-interest rate regime that had dominated the past decade. Other speculative investments have also thrived, while at the other end of the spectrum, Big Tech companies have emerged as unlikely defensive plays amid the recent market selloff.
Nonetheless, crypto prices are nothing if not volatile. This past week’s big gains may be quickly forgotten if sentiment sours.