The world’s largest cryptocurrency by market capitalization jumped almost 4%, to nearly $26,800, on Wednesday, and held above $26,000 for over 24 hours. As of Thursday morning, Bitcoin still was hovering around $26,100.
The total market capitalization for all cryptocurrencies, about $1.06 trillion, showed a 1% day-over-day increase. The crypto market’s upswing mirrors a rise in the stock market, as the S&P 500 is also up about 1%, and the Bitcoin’s price to poor PMI—Purchasing Managers’ Index—numbers, a proxy for economic trends in the manufacturing and service industries. Lower PMI numbers indicate a shrinking market, which bodes well for a reduction in inflation and “suggests a lower likelihood of a rate hike in September,” according to James Butterfill, head of research at CoinShares, a European alternative assets manager.
Joel Kruger, market strategist at LMAX Digital, a crypto exchange for institutional investors, echoed Butterfill’s analysis. “The primary fundamental catalyst for the move higher comes from traditional markets,” he told Fortune in an email. “With stocks rallying, and the U.S. dollar selling off, Bitcoin was able to benefit.”
View this interactive chart on Fortune.com
The rally in Bitcoin’s price follows a precipitous drop last week in which it took a nosedive of almost 8%, pulling down the rest of the crypto market with it. The recent ups and downs of Bitcoin’s price also come amid a period of relative stability for the historically volatile asset. Its 90-day volatility rate was recently the lowest it’s been since 2016.
Those comparatively placid waters stand in contrast to Bitcoin’s surging price throughout 2023. In January, it was less than $17,000. However, amid the banking crisis in March, which most famously felled Silicon Valley Bank, Bitcoin surged to almost $28,000.
After stalling for two months, the digital asset skyrocketed past $31,000 following BlackRock’s application for a Bitcoin spot ETF, a move that many saw as a resounding mark of approval for the cryptocurrency, given that BlackRock, the world’s largest asset manager, is a titan in the financial industry.
“The primary reason we haven’t seen significant price surges, even with the current economic landscape and favorable valuation metrics,” Butterfill of CoinShares told Fortune, “is because investors are currently in a holding pattern, awaiting the SEC’s verdict on the approval of a spot-based ETF in the U.S.”
