Bitcoin and US stocks hit record highs this week.

Bitcoin reached a new price peak, US stocks returned to record highs, and the USD strengthened, making the past week a turbulent one for investors.

This week, the S&P 500 hit its 17th record high of the year on March 12th, as investors ignored higher-than-expected consumer price increases and welcomed a cooling in some categories such as food prices.

However, US stocks began to cool down mid-week due to renewed concerns about inflation. The latest Producer Price Index, released on March 14, showed that US wholesale inflation rose 1.6% in February, the fastest increase in months, driven by a surge in energy prices.

"We're seeing a trend that's deviating from the target everyone was hoping for, especially as the Fed has a clear intention to see inflation cool down," commented Ken Tjonasam, investment strategist at Global X.

As a result, at the close of trading on Friday (March 15), the Dow Jones index fell 191 points, or 0.5%, while the S&P 500 and Nasdaq fell 0.7% and 1%, respectively. Therefore, all three major indices ended the week lower.

Traders on the New York Stock Exchange, February 7. Photo: Reuters

Next week, the US stock market will depend on economic data and corporate events. The Federal Reserve (Fed) begins its two-day policy meeting on March 19th. Investors expect the Fed to keep interest rates unchanged this month and begin cutting them in June or July.

Investors will also be closely watching the latest economic forecast summary. The release will include charts of interest rate expectations for the next few years from each member of the Federal Open Market Committee. Wall Street will also be analyzing a range of new housing market data released by the Census Bureau, the Home Builders Association, and the Realtors Association.

Several major corporate events also have the potential to make an impact. Nvidia will hold its global artificial intelligence (AI) developer conference from March 18-21, featuring a keynote speech by CEO Jensen Huang. Also related to AI, Super Micro Computer will be added to the S&P 500 index before the market opens early next week. The stock has risen 276% this year.

But US stocks weren't the only investment channel to thrive this past week. The cryptocurrency market also experienced a surge, with Bitcoin reaching an all-time high of $73,750 on March 14th.

According to Reuters, the most common reason given for this Bitcoin price surge is the US Securities and Exchange Commission's approval of Bitcoin ETFs in January, as well as expectations that central banks will cut interest rates.

But by the end of March 16th, Bitcoin had also cooled down quickly, falling about 7.7% from its peak. "Bitcoin has a history of significant volatility after reaching record highs," said Matt Simpson, senior market analyst at City Index.

Joshua Chu, chief risk officer at financial technology firm Invess, said that unlike traditional stock markets, the cryptocurrency market lacks regulations to limit the impact of influential individuals or organizations with concentrated holdings. "This allows whales to make significant transactions, causing cascading effects and rapid price volatility," he said.

However, Bitcoin's price remains nearly 60% higher than at the beginning of the year, supported by the cryptocurrency craze fueled by capital inflows into spot cryptocurrency products in the US and traders' continued optimism about the prospect of lower global interest rates later in the year.

Bitcoin price movements (blue) and the halving events that have occurred. Graphic: Reuters

The price of Bitcoin is expected to fluctuate in line with the next "halving" event, which will take place in April 2024. Occurring every four years, a "halving" is an event where the number of new Bitcoins created through mining is halved, making the supply scarcer until it reaches a maximum of 21 million Bitcoins. Currently, 19 million Bitcoins have been issued.

Within the cryptocurrency community, there are differing opinions regarding the impact of "halving" on the future price of Bitcoin. Some believe that scarcity will drive up Bitcoin's price, following the rule that the lower the supply of a commodity, the higher its price will be when demand does not decrease or increases.

Others argue that any impact from the upcoming "halving" on scarcity has already been factored into the current price. The supply of Bitcoin to the market also largely depends on cryptocurrency mining companies. But this sector is unclear, with inventory data being a mystery. If mining companies sell off their reserves, it could put downward pressure on the price.

Besides stocks and Bitcoin, the USD also had a strong week. The Dollar Index – which tracks the greenback against six other major currencies – reached 103.43, with a weekly gain of 0.7%, its largest since mid-January. The USD rose due to a series of data showing the US economy remains stable, signaling that the Fed may keep interest rates high for longer or reduce the number of planned rate cuts this year.

Eugene Epstein, head of North American investments at Moneycorp, believes there is nothing to suggest the Fed is in a position to become dovish ahead of next week's meeting. "That's why we're seeing Treasury yields rise and the USD strengthen," he said.

Phiên An ( according to Reuters, CNN )

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