Cryptocurrencies rose broadly on Tuesday in opposition with the stock market after the ratings agency Moody’s put the U.S. banking sector on watch.
Bitcoin advanced about 1.5% and was last trading at $29,523.51, according to Coin Metrics. The price of the flagship cryptocurrency failed to move more than 1% in either direction for 14 consecutive days ending Monday. The crypto market trades 24/7.
The moves began early Tuesday morning after Moody’s cut ratings of 10 U.S. banks and put some big names – including Bank of New York Mellon, U.S. Bancorp, State Street and Northern Trust – on downgrade watch.
Earlier in the year, the crisis among U.S. banks sparked major rally in bitcoin as investors rediscovered the network’s appeal as an alternative banking system. Volatility in bitcoin and ether trading dropped sharply in May after the banking crisis seemed to peter out and is now at multi-year lows, according to Kaiko.
Tuesday’s news echoes that sentiment, according to Greg Magadini, director of derivatives at Amberdata.
“Bitcoin is holding strong. The correlation between the stock market and bitcoin is decoupling as bitcoin has proven to be a beneficiary of banking turmoil,” he told CNBC.
While the major stock market averages fell, crypto-related equities were higher. Crypto exchange Coinbase rose 2.3% and bitcoin proxy Microstrategy added 4%. Mining stocks across the board were higher by at least 3%.
Bitcoin’s move pulled the rest of the crypto market higher too. Ether rose more than 1%, and Ethereum alternatives gained too, with the tokens tied to Solana and Polygon up 4.5% and 3.5%, respectively. In DeFi, the Uniswap token added 2%. Payments token XRP climbed more than 2%.