Bitcoin rebounded above $79,000 on Wednesday, recovering from losses in the previous session as renewed interest in cryptocurrency investment products helped support the market.
Bitcoin was last trading at around $79,491, up about 0.8% at the time of the latest market report. The recovery came as investors showed stronger interest in crypto exchange-traded products, including the recently launched Zcash ETF, which has attracted fresh inflows.
The rebound follows a period of weakness for Bitcoin, which fell below $79,000 on Tuesday amid growing concerns about US monetary policy and the economic impact of rising oil prices.
The broader cryptocurrency market also moved higher. Ethereum gained about 0.6% to $2,506, while XRP rose around 2.1% to $1.43. Other major cryptocurrencies, including Solana, Cardano and BNB, recorded smaller gains.
One factor supporting the latest recovery has been increased investor interest in crypto exchange-traded funds. US-listed spot Bitcoin and Ethereum ETFs have recorded substantial inflows in recent weeks, signalling renewed institutional appetite for digital assets.
The launch and strong performance of products linked to Zcash, a privacy-focused cryptocurrency, have also attracted attention. Zcash has surged sharply in recent weeks, with its price climbing above $1,000 amid strong demand and inflows into Grayscale’s Zcash ETF.
However, Bitcoin’s recovery remains under pressure from wider economic developments.
According to Reuters, the biggest concern is the sharp rise in global oil prices. Brent crude climbed above $100 a barrel on Wednesday, its first move above the psychological level since July, as the conflict involving the United States, Iran and regional groups intensified. Higher energy prices have raised fears of renewed inflation.
Rising inflation could complicate the Federal Reserve’s interest-rate decisions. Investors are closely watching US inflation data due later this week, with markets increasingly pricing in the possibility that the Fed could keep rates higher for longer or even raise rates at its upcoming meeting.
Higher interest rates generally put pressure on riskier assets such as cryptocurrencies because they make traditional interest-bearing investments more attractive.
The US 10-year Treasury yield has also climbed towards 4.8%, reflecting growing concerns about inflation and monetary policy.
Bitcoin therefore faces competing forces: stronger ETF and institutional demand is supporting prices, while rising oil costs, inflation fears and uncertainty over Federal Reserve policy are limiting the cryptocurrency’s recovery.
Despite Wednesday’s rebound, Bitcoin remains well below the levels reached during previous rallies, with investors watching whether it can sustain the move above $79,000 or face renewed selling pressure.
For now, the cryptocurrency market remains highly sensitive to developments in both global financial markets and the escalating Middle East conflict.
(Investing.com, NT. Photo: AFP)