Bitcoin Stabilises At $41,600 As European Stocks Show Improvement

European stock markets recovered a bit Thursday from slumps the previous day, with investors comforted by brighter economic outlooks and easing coronavirus concerns, analysts said.

Bitcoin stabilised after Wednesday’s wild gyrations that saw the world’s most popular cryptocurrency lose almost a third of its value in one day before recovering much of the losses.

London stocks gained 0.5 percent overall in afternoon exchanges.

Frankfurt stocks added 1.0 percent and Paris won 0.8 percent following a mixed session in Asia, as dealers mulled reportedly upbeat remarks from the head of the European Central Bank.

US stocks advanced in early trading as new filings for unemployment aid declined for the third straight week in the United States, according to government data that showed the closely watched metric hitting a new pandemic low.

Oil however fell further after US data showed a jump in stockpiles, indicating weaker demand in the world’s top crude consumer.

“The more upbeat tone in Europe comes as authorities across the region are easing pandemic restrictions due to a falling number of Covid cases and rising vaccine rates,” said OANDA analyst Sophie Griffiths.

“ECB Governor Christine Lagarde noted the improving Covid picture in Europe while insisting that monetary and fiscal support should not be withdrawn too soon.”

Bitcoin edged up Thursday to around $41,600, having endured a rollercoaster Wednesday after China signaled a new crackdown on the cryptocurrency and Elon Musk gave crucial support on Twitter.

Europe’s bourses had tanked Wednesday on fears that central banks will wind down easy money policies to tame high inflation.

Thursday’s gains were still capped after minutes showed some US Federal Reserve officials contemplating a cut in its vast monetary easing measures.

Nevertheless, global equities have soared after hitting their pandemic nadir in March last year, thanks to central bank largesse and mind-boggling government spending measures, with recent gains also helped by the rollout of vaccines and easing of lockdown measures.

Investors are now increasingly concerned that the blockbuster bounceback expected in the world economy will fan inflation as the stimulus mixes with cashed-up consumers, who have been unable to spend, finally being let loose.

The Fed has emphasised however that it sees upward pressures as transitory and that prices should stabilise next year and says it will maintain very accommodating monetary policies and record low-interest rates until unemployment has been tamed and inflation is consistently strong.

However, with the economy well on the recovery track, minutes from the Fed’s April meeting released Wednesday indicated that some board members consider the time might soon come to at least begin discussing the bank’s position.