Cryptocurrencies Rebound Amid Positive Market Sentiment

Cryptocurrencies experienced a notable recovery on Friday following two consecutive days of decline, as investors moved back into risk assets. Bitcoin rose by 4.5%, reaching $67,720.83, according to Coin Metrics, while Ether increased by 4%, trading at $3,248.25.

In the equities market, the tech-focused Nasdaq Composite and the broad-market S&P 500 also rebounded after experiencing their worst single trading day since 2022 earlier this week. Stocks such as Coinbase and MicroStrategy saw significant gains, rising by 7% and 10%, respectively.

Bitcoin’s surge came in response to the Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index, which indicated a slight easing of price increases in June compared to a year ago. This development has fueled anticipation of a possible interest rate cut by the Fed in September.

Additionally, investors are keenly watching the Bitcoin Conference in Nashville, where former President Donald Trump is set to speak on Saturday. His recent portrayal as a pro-crypto candidate in the election has led many to expect that favorable remarks from him could further bolster cryptocurrency prices in the coming days.

Despite Friday’s recovery, Bitcoin’s weekly performance remains relatively flat, while Ether is on track to end the week with an 8% loss. The recent downturn in tech stocks, driven by underwhelming quarterly earnings reports from companies like Alphabet and Tesla, prompted investors to move away from riskier assets, including Bitcoin and Ether.

The market is also navigating the ongoing Mt. Gox repayment schedule, which has contributed to selling pressure on Bitcoin this month. Meanwhile, the newly launched Grayscale Ethereum Trust (ETHE) has faced significant outflows compared to inflows into other funds, exerting additional downward pressure on Ether’s price