<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1654527007678,"cms.content.publishUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1654527007678,"cms.content.updateUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_54526892", "obj": {"id":"27789","width":"16","height":"9","video":"1025351"} }); ","_id":"00000181-397e-d421-ada5-7d7f8b480000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video Embed
Bitcoin surged on Sunday, ending in the green and terminating the longest losing streak the cryptocurrency has faced since its inception.
The flagship cryptocurrency was up nearly 6% on Monday and trading at about $31,400 after lurching upward on Sunday. It closed out the week about $450 above what it was at the previous Sunday, the first weekly gain after nine straight weeks of losses.
Sunday’s pop is likely to calm the nerves a bit of some white-knuckled cryptocurrency investors who have watched bitcoin and other digital assets shed billions of dollars in value since the start of the year. Still, the price of bitcoin is much lower than it was months ago amid a broader selloff of traditional blue-chip stocks.
Ethereum also climbed higher on Monday and was resting at about $1,900. Ripple was up 2.7% at 40 cents, Cardano grew more than 10% to 66 cents, and Solana was trading at $43.45, an 11.7% increase. Nearly all the largest cryptocurrencies by market cap were in the green on Monday morning.
TWELVE PERCENT OF US HELD OR USED CRYPTOCURRENCIES IN PAST YEAR: FED
“We believe this relief rally is a bull trap and that bitcoin may have a short-lived gain but is more than likely going to resume the downward trend we’ve seen for the past two months,” said Josh Olszewicz, head of research at Valkyrie Investments.
Olszewicz said that global economic uncertainty coupled with the Federal Reserve hiking interest rates and fear of a recession are driving down cryptocurrency prices. The Fed started raising interest rates in March and has taken an increasingly aggressive tack in doing so.
There are concerns that the federal funds rate going higher and soaring energy prices could cause the economy to tumble into a recession.
In downturns, investors typically flee risky investments in favor of safer and more stable stores of value. Bitcoin and other cryptocurrencies are still a new asset class, and some of those who have invested in the coins have been selling off their holdings for fear that they will crash, resulting in a chain reaction effect.
Bitcoin peaked last year at about $69,000 and is now down more than 53% from its November zenith. Bitcoin is also down more than 34% since the start of the year and nearly 13% in the past month alone.
Traditional stocks have also not fared too well this year, which has featured historic inflation and the war in Ukraine.
Consumer prices increased 8.3% in the 12 months ending in April, a slight downward tick from the month before but still near the highest they have been since the 1980s. The Fed’s monetary tightening is a direct response to inflation and is designed to depress demand in the economy.
Russia’s war in Ukraine has also buffeted the markets by adding pressure to the already inflated energy sector. Gas prices have been breaking records daily, with the nationwide average for a gallon of gasoline clocking in at $4.87 on Monday.
The stock market has been flirting with a bear market.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Late last month, the S&P 500 briefly entered bear market territory, a phrase that indicates that an index has dropped by at least 20% from a recent high. While the index has recovered some over the past week, the S&P 500 has fallen more than 13% since the start of the year, its most recent high. The Nasdaq composite entered a bear market a while back and has shed nearly 23% of its value since January.
Goldman Sachs projects a 35% chance of a recession in the next two years, while Wells Fargo’s economic model assigns a 30% chance of a recession occurring in just the next six months alone.
