Bitcoin has exploded higher in recent sessions with the market gaining in excess of $1500 since Friday and moving within striking distance of the big $10,000 level. Elsewhere, it’s been a bright start to the week for UK assets with both the FTSE 100 and pound moving higher, with the former adding just over 25 points as the European session approaches its mid-point.
Crypto rally shows little sign of ceasing
The gains seen in cryptocurrencies this year have been arguably the biggest story in the financial world despite global stock markets enjoying their broadest rally in a decade. More than half of the 35 major indexes representing the world’s biggest stock markets by value have hit all-time highs this year (the most since 2007) but their gains have been dwarfed by those seen in the rapidly expanding cryptocurrency market. Bitcoin, the clear market leader in this space, has surged in excess of 900% year-to-date and with a further $1500 rally seen since traditional markets closed for the weekend, the price currently sits not far from the $10,000 handle.
Bitcoin just getting started?
The gains seen in Bitcoin have been surpassed in percentage terms by several other crypto markets and today both Ethereum, the second largest player in the asset class, and Litecoin have also both made fresh all-time highs. CME are planning on offering futures contracts on Bitcoin in just a matter of weeks and should this attract a surge of institutional interest, then the rise seen so far, which has been largely driven by retail traders, could be just the beginning.
Pound rises close to 2-month high
Sterling has begun the week on the front foot with the pound coming within a whisker of last week’s high against the US dollar above 1.3350. Should the pair break above this level then you have to go back to the start of October to find a higher price. The dovish hike from the Bank of England caused a negative market reaction in the pound but with these declines having subsequently been recovered there is a growing probability that there is an extension of the rally seen since the January lows heading into year-end.
FTSE firming up above 7400
Friday’s close marked the first weekly gain of the month for the FTSE 100, with the market snapping a 2-week losing streak. Even though the benchmark has failed to join in the majority of its peers in breaking to all-time highs this year, 2017 has still been a year of gains and the market currently sits only a couple percent from its record peak. This morning has seen a rise of 25+ points with GlaxoSmithKline (LON:GSK) and easyJet (LON:EZJ) the two biggest gainers. An upgrade from UBS on the pharma giant has brought about the rise and even though the Swiss bank believe that things will likely get “tougher” for GSK on the earnings front in the coming years, they believe that concerns surrounding their earnings declines and dividends are now “overdone.” EasyJet has enjoyed a nice move higher in recent months and the stock of the budget airline is now approaching its 2017 peak made back in the summer.