Bitcoin Rallies Back as Tech Rebound Sparks Speculative Appetite

(Bloomberg) -- Bitcoin climbed alongside technology stocks as a revival in risk appetite spread to cryptocurrencies, lifting the token out of a bout of listless trading and offering another sign of resurgent speculative fervor across global markets.

The original digital asset rose as much as 2.4% to $84,737 as a rally sparked by SpaceX earnings helped reignite enthusiasm for riskier assets, even as questions lingered over the sustainability of the artificial intelligence boom.

Also helping sentiment: the Office of the Comptroller of the Currency unveiled a final measure for payment stablecoin issuers, in latest sign pro-industry development.

The latest uptick has been in part driven by a rebuilding of leverage via perpetual futures. Open interest, or the total outstanding number of the futures contracts, has been rising again after weeks of deleveraging, according to data compiled by Coinglass.

"Risk assets in general got a lift from solid earnings and renewed AI interest while oil remains elevated and choppy." said Jasper De Maere, an over-the-counter trader at Wintermute. "At the moment, this still feels like a recovery vs the start of a rally, however that could turn quickly if we approach $87,000 Bitcoin with decent momentum."

Besides futures, the crypto options market is posing a bullish posture as well with demand clustered around call contracts at the strike prices of $95,000, $90,000 and $100,000, according to crypto exchange Deribit.

"The longs that were on got cleared out on the way down, and a good part of the bounce was shorts closing. That's largely positioning resetting rather than new leverage going on," said Himanshu Sahay, co-founder of Arch Lending.

Many analysts are monitoring Bitcoin ETF flows for a read on the health of the rally and retail investor involvement. Over the past month, some $2.3 billion has gone into spot funds, data compiled by Bloomberg show, suggesting renewed investor interest. Within the cohort of offerings, BlackRock's IBIT has been the biggest beneficiary, absorbing the majority of those flows during that stretch.

Still, researchers at Glassnode say that though spot ETFs have seen inflows, it hasn't come with heightened trading volume. "Inflows that repeat on rising volume would show demand broadening beyond a single day," they wrote in a note Wednesday.