Bitcoin surged past $62,000 on Tuesday, clawing back losses from a brutal selloff that had dragged the world's largest cryptocurrency below $58,000 just days earlier. The digital asset was trading at $62,350 by late afternoon London time, a gain of 4.2 per cent on the day, according to data from CoinMarketCap. Ethereum, the second-largest cryptocurrency, rose 3.8 per cent to $2,720, helping to lift the total crypto market capitalisation by roughly £120 billion.
The rebound follows a turbulent period for crypto markets, which shed more than 15 per cent of their value last week amid fears of a broader economic slowdown and a crackdown on crypto trading in Asia. Analysts say the recovery is being driven by short-covering and bargain hunting, as well as growing expectations that the US Federal Reserve will cut interest rates as early as September. Lower rates tend to boost demand for riskier assets like cryptocurrencies.
“This is a classic relief rally after an overdone selloff,” said Marcus Thorne, a digital assets analyst at London-based Capital Partners. “The macro backdrop is improving, with inflation data softening and the dollar weakening. That’s positive for Bitcoin and other risk-on assets.” Thorne cautioned, however, that volatility remains high and further dips are possible in the near term.
For UK investors and pension holders, the crypto market’s gyrations serve as a reminder of the asset class’s speculative nature. While direct pension exposure to Bitcoin remains limited, many UK funds have indirect exposure through investment trusts and exchange-traded products. The recent selloff wiped out gains made in June, though Bitcoin is still up more than 40 per cent year-to-date.
Regulatory developments also hang over the market. The UK’s Financial Conduct Authority (FCA) is expected to publish updated guidance on crypto asset promotions later this year, which could tighten rules around marketing to retail investors. Meanwhile, the US Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds earlier this year has drawn institutional money into the sector, providing a floor under prices.
Source: CoinMarketCap, Reuters