“Late on Wednesday and early Thursday, a surge in Bitcoin (BTC) prices nearly brought it close to breaching the $36,000 mark, a level it hasn’t reached since the spring of 2022. However, this upward movement seemed to trigger a series of sell orders, resulting in a drop of nearly $1,300 in just a few hours, bringing the current price to $34,700.
The decline in Bitcoin’s price is particularly noteworthy given that risk assets in various markets are experiencing significant gains on Thursday. In the U.S., both the Nasdaq and S&P 500 have surged by 1.5%, while Europe’s Stoxx 600 is up by 1.8%. Traditional markets are rallying in conjunction with a notable drop in interest rates, reflecting the growing consensus that major Western central banks might halt their rate hikes. The Bank of England, following the U.S. Federal Reserve’s decision, maintained its policy stance today. Just a week ago, the European Central Bank did the same.
Despite this pullback, Bitcoin has managed to maintain a 1.25% increase over the past 24 hours, slightly underperforming the broader CoinDesk Market Index (CMI), which gained 1.6%.
“Exponential Gold”
Perhaps inspired by Bitcoin’s recent substantial gains, Jurrien Timmer, Fidelity’s Director of Global Macro, took to Twitter to suggest revisiting his bullish 2020 thesis on cryptocurrency.
Timmer stated, “Bitcoin is a commodity currency with ambitions to serve as a store of value and a hedge against monetary devaluation. I view it as ‘exponential gold.'”
He further elaborated, saying, “During periods characterized by high inflation, negative real interest rates, and excessive money supply growth, gold tends to shine… Could Bitcoin play a similar role? I believe the potential is there.”