Bitcoin (BTC) Rises as Investors Rotate Out of Chip Stocks
Bitcoin (BTC) is on an upswing to begin the year’s third quarter.
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On July 2, BTC is trading at $61,600, up 3% in the last 24 hours and above the key support level of $60,000 that analysts watch closely. Other digital assets are also marching higher, with Ethereum (ETH) also up 3%. Crypto trades around the clock: 24 hours a day, seven days a week.
Investor capital appears to be returning to Bitcoin and other digital assets amid a rotation out of richly valued stocks of microchip companies tied to the artificial intelligence (AI) infrastructure buildout. After tripling in this year’s first half, many chip stocks are experiencing a sharp pullback to begin the third quarter of the year.
Chip Stocks Fall Sharply
High-flying stocks such as SanDisk (SNDK) and Micron Technology (MU) each fell 10% on July 1 amid profit taking and a rotation into other areas of the stock market. On July 2, SNDK stock is down another 15% while MU stock has fallen 7% on the day. South Korea’s Kospi index dropped 8% on July 2 as its market dominating chip stocks that include Samsung (SSNLF) declined as much as 15%.
The recovery in cryptocurrencies comes after the asset class suffered its worst performance in four years during this year’s second quarter. Bitcoin’s price fell nearly 20% in June. Now, it looks as though crypto is benefitting as a rotation is underway in the market to begin the third quarter.
However, some analysts continue to warn investors to proceed cautiously with cryptocurrencies. U.S. bank Citigroup (C) lowered its target price for Bitcoin over the next year to $82,000 from $112,000 and warned investors about continued volatility in digital assets.
BTC’s Three-Month Performance
Not enough analysts cover Bitcoin, so we’ll look instead at its three-month performance. As one can see in the chart below, Bitcoin’s price has declined 14% in the past 12 weeks.
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