Crypto tops stocks, gold on best bitcoin streak in nearly a year

Bloomberg

A cryptocurrency sector battered by turmoil last year is showing some signs of life early in 2023, posting bigger gains than other major asset classes including stocks, bonds and gold.
The MVIS CryptoCompare Digital Assets 100 Index of top tokens is up some 6% so far this month, exceeding advances of about 2% in global stocks, 1% in world bonds and 3% from gold, according to data compiled by Bloomberg.
Global markets are taking heart from the possibility that central banks are closer to calling time on rapid interest-rate hikes as inflation eases from very high levels. Some of that tentative relief has spilled over into crypto, even as the threat of further bankruptcies hangs over the industry after FTX’s collapse.
Some of the sharpest crypto gains lie outside of the largest token Bitcoin. Second-ranked Ether is up 9% so far this month. Solana, a token that shed almost all its value last year because of a link to FTX’s fallen founder Sam Bankman-Fried, has added over 60% in the early days of January.
An upgrade of Ethereum blockchain, crypto’s key commercial highway, is also engendering optimism. The upgrade, called Shanghai, may materialise in March. It will allow investors to withdraw Ether they locked up to help operate the network. The latter process is known as staking and earns rewards.
Some crypto protocols seek to provide easier and more flexible access to staking rewards, and coins linked to them have surged. Examples include StakeWise’s Swise, Lido DAO and Rocket Pool’s RPL, which are up 113%, 107% and 21% respectively in January, according to data from CoinGecko.
Bitcoin rises 1.7% and was trading at $17,200 in London, a three-week high. Solana added about 19% and Cardano 12%. Bitcoin and gauge of top 100 digital assets sank over 60% in 2022, hurt by sharply tightening monetary policy and a series of blow-ups culminating in the unravelling of the FTX exchange, which owes billions of dollars to customers.
Trading volumes crashed and volatility ebbed as investors fled, highlighting lingering worries about the risk of further bankruptcies in the contagion from the alleged fraud at FTX.