Bitcoin Sailed Past $124,000, Ethereum Gains. This Is the Next Test for Cryptos. — Barrons.com
By Adam ClarkBitcoin and most other cryptocurrencies were gaining on Thursday.It hit a new high of above $124,000 overnight, but the largest cryptocurrency has subsequently fallen back from its peak. Bitcoin's price was up 1.8% over the past 24 hours early on Thursday, at around $121,708.Bets on interest-rate cuts and the increasing presence of crypto-related companies in public markets look to have been boosting the sector. Several large altcoins were rising, with Ether up 2.5% to $4,740 and is testing its highest levels since late 2021. Solana gained 3.2% and XRP rose 0.1%. However, memecoin Dogecoin was down 0.3%.Shares of cryptocurrency exchange Bullish soared 84% in its initial public offering Wednesday. Bullish launched in 2021 and is backed by prominent investors including Peter Thiel's Founders Fund and hedge fund manager Louis Bacon.Traders are increasingly confident the Federal Reserve will lower borrowing costs at its Sept. 17 decision. Lower rates make risky assets such as stocks and digital assets more attractive relative to lower-yielding investments such as bonds. Reduced rates also tend to weaken the dollar, which boosts crypto valuations.The next test is producer price index data on Thursday, which is likely to show wholesale prices increased 0.2% from a month earlier, according to economists polled by The Wall Street Journal."If inflation comes in higher than expected, investor appetite for risk could weaken and the rally could stall," said XBTO Chief Investment Officer, Javier Rodriguez-Alarcón. "Overall, the market remains concentrated at the top. Bitcoin continues to serve as the anchor, while Ethereum, supported by institutional inflows and corporate treasury buying, has a potential path toward testing prior all-time highs if conditions remain favorable."Write to Adam Clark at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.