Bitcoin rises above $30k

13 May 2022

The Bitcoin price rose above $30,000 on Friday, ending what had looked to be its worst week in four years.

The BTC price was up 13% by 07:10 GMT to trade at $30,510, having plunged to as low as $26,600 the day before, a December 2020 low.

However, Bitcoin is falling far short of last week’s levels of around $40,000. "I don't think the worst is over," according to Scottie Siu, investment director of Axion Global Asset Management.

"I think there is more downside in the coming days. I think what we need to see is the open interest collapse a lot more, so the speculators are really out of it, and that's when I think the market will stabilise."

The Bitcoin price rise was predominantly due to easing fears surrounding the world’s largest stablecoin network, Tether, which had fallen more than 6% to 95 cents on Thursday, according to CoinMarketCap data. On Friday it was back at $1, Reuters reports. This came after its chief technology officer Paolo Ardoino assured investors over 50% of its reserve is held in liquid, risk-free Treasury bills. 

In addition, the markets were shaken by TerraUSD as it broke its 1:1 Dollar peg this week. The use of another digital token, the mechanism for remaining stable, buckled under selling pressure, and was last trading near 10 cents.

"Over half of all Bitcoin and Ether traded on exchanges are versus a stablecoin, with USDT or Tether taking the largest share," analysts at Morgan Stanley said in a research note.

"For these types of stablecoins, the market needs to trust that the issuer holds sufficient liquid assets they would be able to sell in times of market stress."

In addition, the world’s second-largest cryptocurrency by market cap, Ether, steadied around the $2,000 mark on Friday, after falling to a low of $1,700 on Thursday. Both Bitcoin and Ether are around 60% under all-time highs hit last November.