Bitcoin trended toward the high end of its more than two-month trading range as risk assets rallied on optimism that the US can strike a deal with Iran to end their conflict.
The largest cryptocurrency by market value reached a four-week high, climbing as much as 4% to $76,094, the most since Feb. 4, before paring gains to trade around $74,000. Smaller tokens also advanced, with Ether up as much as 7.3% to over $2,400.
Both crypto spot and derivatives markets have shown signs of modest recovery with trading volumes in spot climbing by 18% over the past week, according to data compiled by K33 Research. Premiums on Bitcoin futures trading on the CME approached the peak levels of the past three months.
The moves followed President Donald Trump’s claim that Iran had reached out to his administration for potential peace talks, even as the US began a naval blockade of the Strait of Hormuz. Asian stocks also climbed on optimism that a deal would help ease oil prices and boost economic growth.
“Bitcoin is following the rally in broader risk assets,” said Damien Loh, chief investment officer at Ericsenz Capital. “Even though a blockade was initiated, the market took it as a positive that Trump effectively extended the timeline to make a deal and that he is reportedly seeking another round of talks.”
Loh added that Bitcoin “continues to trade better than broader risk assets,” but it may not see a significant move higher until the US passes the Clarity Act, a regulatory framework for digital assets.
Meanwhile, Goldman Sachs filed paperwork with US regulators for the Goldman Sachs Bitcoin Premium Income ETF, the latest big bank to throw its name behind a digital assets-based exchange-traded fund. The move comes despite David Solomon, Goldman’s CEO, previously expressing skepticism toward crypto. Just last week, Morgan Stanley launched its own Bitcoin-tracking ETF, which has grown its assets to $70 million currently.
“It’s a big deal,” said Bloomberg Intelligence analyst James Seyffart. “Yet another Wall Street bank filing to launch a Bitcoin ETF — albeit a covered-call product that will hold other spot ETFs — is symbolic of the growing acceptance of Bitcoin as a global asset and of crypto more broadly by Wall Street.”
Other corners of the crypto markets point to more defensive positions, with perpetual futures still seeing negative funding rates. Open interest for downside protection at a strike price of $60,000 remained elevated, according to Coinglass and crypto exchange Deribit.
Since its crash from an all-time high of $126,000 in October, Bitcoin has been trading in a tight range for the past two months. However, the token has fared better than many traditional assets since the US war with Iran started at the end of February. It is up more than 10% since Feb. 27, while gold has fallen nearly 10%. The S&P 500 index is roughly flat for the same period.
Traditionally, Bitcoin has traded more in line with risk assets — a pattern it is following once again.
“Bitcoin has been behaving more like a classic risk asset than a traditional safe haven, and the improvement in overall risk sentiment this month has provided a tailwind for its recent gains,” IG Markets analyst Tony Sycamore wrote in a note. “For a more bullish medium-term outlook to develop, Bitcoin would need to see a sustained break and close above trend-channel resistance at $79,000.”
US-listed spot Bitcoin exchange-traded funds saw $194.5 million in net outflows on Monday, according to data compiled by Bloomberg. It was the largest single day of outflows in more than two weeks, after net inflows of $771.4 million last week.
“The prospect of a deal between the US and Iran that could resolve the conflict has triggered risk-on mode across financial markets with Bitcoin beaming brightly as a green beacon to all traders clicking the buy button,” Petr Kozyakov, co-founder and CEO at Mercuryo, a payment infrastructure platform, wrote in a note.
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
Read more articles by Matthew Brockett, David Pan
