Bitcoin Seems to Be Holding Its Own, Even Going Green, While Big Tech Stocks Crumble
On July 25, 2021, bitcoin began a miraculous run that would be highlighted by a 5% increase late that night (Eastern Time). In the middle of October, Bitcoin was trading for over $30,000; by November, it had risen to a record high of around $68,000.
That time period, which is already ancient history, sprang into my brain unexpectedly last week. On October 25 at 1 PM EST, Bitcoin was trading at $19,808.06, reached a high of $20,176, and was trading at $20,126.20 at 2 PM ET. In an hour where prices can only rise, the low point was also $19,808.06.
Even while this change wasn’t as shocking as the one in July 2021, it nonetheless got people talking (astute readers will see another such candle on the morning of October 26). This hour of price movement cannot be seen as the beginning of another run-up to all-time highs, and I am not claiming that past performance is predictive of future results (though history tends to rhyme).
Let’s be honest, though: The Bitcoin market has been dull lately, and last week was especially so. The rise is especially notable given the terrible performance of large technology companies’ equities last week.
Remember inflation?
To kick things off, let’s talk about the positive week Bitcoin had.
There could be several factors behind the rise in Bitcoin’s price on Wednesday, but here are two that stand out. In a surprising move to the financial markets, the Bank of Canada only increased interest rates by 50 basis points instead of the expected 75 basis points. New house sales dropped by 10.9 percent in September, according to the U.S. Census Bureau.
Both contribute to the same theory: that central banks may delay further rate hikes now that the economy is slowing down sufficiently to control inflation. The Canadian government failed to increase by as much as was predicted. Meanwhile, a soaring property market in the United States has contributed to rising prices. Perhaps the U.S. Federal Reserve will begin to consider reducing its own rate increases in response to the dip in home sales.
Meanwhile, in the stock market …
Bitcoin and other cryptocurrencies saw gains, but Big Tech as a whole had losses. This past week saw quarterly financial reports from Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), and Microsoft (MFST). With the exception of Apple, all of these businesses had a rough go of it.
GOOGL lost 6.2%, Amazon lost 13.3%, Apple gained 4.5%, Meta plummeted 23.50%, and Microsoft lost 4.80% between October 24 and October 28.
The value of bitcoin, meanwhile, rose by 6.8 percent.
