Bitcoin hits 6-month high as crypto market regains $85 billion in value

Bitcoin’s price hit a six-month high on Thursday as the cryptocurrency market’s total value rose by nearly $85 billion to peak at $1.1 trillion.

The world’s largest crypto is trading around $24,376, up 7.3% in the last 24 hours, according to Messari.

Ethereum, the second largest crypto by market cap, is trading 6.7% higher at $1,673 as well. The crypto market has largely been on a tear since the beginning of the year, with bitcoin and ether up 49% and 39% so far this year.

This comes amid a broader rally in risk assets, with the Nasdaq Composite posting double-digit gains since the start of this year.

“The market has shown a more positive sentiment in recent weeks, which can be seen by the fact that the futures basis is in contango, setting the call ratio at the lowest levels, but also traditional markets are in more positive territory since the beginning of the year,” Luuk Strijers, Chief Commercial Officer at crypto exchange Deribit, Insider told.

Investors’ risk appetite appears to be growing amid an expected dovishness from the Federal Reserve in the coming months. The central bank delivered its smallest rate hike in nearly a year earlier this month, giving traders leeway to bet on more speculative bets such as high-growth stocks and cryptocurrencies.

Tey ElRjula, co-founder and CEO of blockchain startup FLUUS.com, says a new protocol called Ordinals has also seen a growing number of users flock to Bitcoin’s network. Ordinals allow non-fungible tokens to be minted on the blockchain.

– The increase in price can be attributed to several factors, mainly the adoption of the Ordinals protocol, ElRjula told Insider. “It has resulted in a renewed interest in the development of Bitcoin (BTC) and an increase in the average block size, as an increasing number of users join the network.”

US regulatory scrutiny of the crypto industry also does not appear to have affected investor sentiment.

The top securities regulator is going after Binance-branded stablecoin BUSD, according to the Wall Street Journal on Sunday. Stablecoins are cryptocurrencies linked to a reference asset and often backed by assets such as fiat money or exchange-traded commodities.

Although the crash caused $1.4 billion in redemptions for the token in a matter of days, the report did not greatly affect broader crypto prices.

However, the crypto markets are not ready yet. Macro conditions remain volatile given continued high inflation, and traders are hanging on the Fed’s every word for clues about the direction of monetary policy.

“While it is exciting to see Bitcoin reach a six-month high, there may still be some volatility in the market until inflation concerns are fully addressed,” ElRjula added. “But the overall outlook for the rest of the year is positive, with wider adoption of Bitcoin and other cryptocurrencies expected.”