Bitcoin climbs alongside stocks as US dollar pulls back from surge

• Bitcoin surged as much as 13% on Friday to trade above $21,000 for the first time in two weeks.
• Crypto prices rose alongside a jump in US stocks that put the S&P 500 on track to break a streak of weekly losses.
• Bitcoin and stocks found fuel in a decline in the US dollar, which has risen recently.

Bitcoin surged to a two-week high on Friday as a fall in the strong US dollar contributed to a jump in stocks and other risk assets.

Bitcoin gained as much as 13% to $21,375.38, the first time its price has topped $21,000 since August 26. The increase was later reduced to 11%.

The rally came as U.S. stocks advanced, pushing the S&P 500, Nasdaq Composite and Dow Jones Industrial Average toward snapping a three-week losing streak. The technology-rich Nasdaq was up more than 2% during the session.

“Bitcoin welcomes the return of risk appetite and a falling US dollar. The broad market rally has rejuvenated cryptos, and that could continue if investors continue to look beyond hawkish central bank overtures and lingering recession risks,” Edward Moya, senior market analyst at Oanda, said in a Friday note.

The U.S. dollar index fell 0.7% to 108.36, the weakest level in more than a week. The index that measures the dollar’s performance against six currencies recently hit new 20-year highs above 110. The greenback has advanced as Federal Reserve officials prepare investors for a potential 75 basis point interest rate hike later this month, its third straight hike. size, as the central bank works to cool hot inflation.

Ether, which runs on the Ethereum network, rose as much as 6% to top $1,700 for the first time since August 25. Solana rose 4.2% higher, and cardano rose 2%.

Users of the Ethereum network are preparing for the Ethereum Merge, a network update scheduled to take place on September 13-15. The upgrade is aimed at making the blockchain technology – known for running smart contracts – more efficient and less expensive for transactions.

Cryptocurrency price increases pushed the value of the cryptocurrency market back over $1 trillion this week. The market value fell from more than 3 trillion dollars in November 2021 after a months-long, so-called crypto winter.

Elsewhere on the crypto front, Sam Bankman-Fried’s crypto trading platform FTX said on Friday that it will buy a 30% stake in SkyBridge Capital. The investment company run by Anthony Scaramucci will use part of the funds to buy $40 million in cryptocurrencies to hold the company’s balance sheet as a long-term investment. Financial terms of the agreement were not made public.