Bitcoin Shoots Past $56K as Rally Decouples from Falling Stocks
08 Oct 2021 · 3rd Party Analysis
- Bitcoin price makes a weekly high above $56K, continuing its strong performance this week
- The recent rise contrasts a decline in traditional financial assets such as stocks and gold
Bitcoin Breaks Over $56,000 After Soros Endorsement
The price of bitcoin pushed to a new weekly high on Friday, on track to finish the week higher by more than 15%. More precisely, the orange coin spiked to levels above $56,000 for the first time in five months.
The rally in the cryptocurrency market this week was underpinned by strong fundamentals. Namely, regulatory agencies are looking optimistic toward the future of crypto assets. Since the US Treasury Department and the Federal Reserve said they will not ban bitcoin, fears eased largely.
Moreover, Securities and Exchange Commission Chairman Gary Gensler said this week he has no plans to ban bitcoin. Combined, these remarks sparked hopes that institutional investors will soon be able to join the cryptocurrency market.
On that note, George Soros, a prominent investor and currency trader, is now invested in bitcoin. To be precise, his fund, Soros Fund Management, this week disclosed to the public it owns bitcoin. The news added to the positive sentiment over the past few days.
Cryptos Outperform Stocks amid Declining Growth Prospects
In summary, the month of October seems very beneficial for crypto holders and traders. Since the beginning of the month, the original cryptocurrency has surged about 30% to reach a monthly high of $56,050 a coin. Ether, the second-biggest coin, has gained about 7% for the same period.
On the other hand, stocks on Wall Street endured increased jitters and choppy trading. As the monetary support is about to be reduced as soon as November, equities have been hit. To that end, the main indexes have wobbled throughout the week, as they have been rattled by decreasing confidence.
That being said, the recent rally in bitcoin contrasts the stock market where investors have to price in higher inflation. Besides rising prices, a withdrawal of Fed’s asset purchases has seen optimism for stocks fade. And finally, political uncertainty related to the debt ceiling has prompted money managers to retreat their bets on stocks.
What to Expect in the Markets?
Today, the market has shifted its attention to the latest jobs report, the nonfarm payrolls for September. With that in mind, traders will be watching to see how many new jobs were added by US employers for the previous month. Analysts expect the US economy to have grown by about half a million new hires. The actual number, however, could differ and will highlight the growth pace of the world’s largest economy.
Economic News Today (EST time)
The nonfarm payrolls report arrives at 8:30. At the same time, the unemployment rate will be announced by the US Labor Department. Meanwhile, Canada’s employment change will be published, also at 8:30.