Bitcoin Extends Rally After Biggest Gain in Year

Bitcoin (BTC) was pushing higher after surging 14% on Monday, the biggest price jump in a year.

The largest cryptocurrency by market capitalization was changing hands at $43,922 at press time.

Bitcoin’s performance on Monday took the price back to where it stood in early February, well before it became clear that Russia was planning to invade Ukraine.

The risks from a prolonged war prompted many crypto investors to worry that a new cloud over the economy might sap demand for bitcoin. But the market sentiment turned quickly, and now some traders are speculating that the Federal Reserve might soften any plans to tighten monetary policy aggressively.

Fed Chair Jerome Powell is set to address Congress on Wednesday.

• “Fed tightening won’t be severe at the start, and with yields tumbling hard, this should be an attractive time for cryptos,” said Edward Moya, analyst at Oanda.
• Marcus Sotiriou, analyst at GlobalBlock, noted that markets are now seeing a potentially more accommodative Federal Reserve – a key shift given that “major tightening policy was a major catalyst for stocks and crypto to fall over the past few months.”
• Bitcoin is down 8% year to date, gaining ground on gold, seen by many investors in traditional financial markets as a safe haven during times of geopolitical turmoil and reduced risk-taking. Gold is still winning so far in 2022, up 6% on the year.