Bitcoin is back

Bitcoin rallied 13% over the past four days, but not as an alternative hedge. It is moving with the rest of the market’s highest-volatility trades, undercutting both the haven case and the idea that crypto needed retail investors to rotate out of AI before it could recover.

No matter: Bitcoin bulls will take the rally, whatever the macro explanation (the price has pulled back a bit this morning). That is, after all, how a speculative, momentum-driven asset tends to behave.

Digital assets more broadly have surpassed $3 trillion in market value for the first time since January after Bitcoin’s rally.

The bigger question is what sits underneath the move. Bitcoin remains well below its January high and further still from October’s record, and the jury is out on how much of the rebound is shorts being forced out versus genuinely new bullish positioning.

Some fresh longs have been built, and ETF demand is likely to be firm. For now, though, Bitcoin’s fortunes look increasingly tied to the animal spirits driving technology stocks — hardly the decoupling its most ardent advocates like to tout. —Sid Verma