• Bitcoin’s performance last week was its best since October, with a surge of over 13 percent.
  • The bullish momentum on the crypto market is supported by the AI-driven surge in the S&P 500.

Bulls appear to dominate the so-called risky areas of the financial markets.

BTC Price Index and Live Chart – CoinDesk”>(BTC), the leading cryptocurrency by market value, rose nearly 13.5% to $48,300 in the seven days to Feb. 12, the biggest single-week gain since October, according to CoinDesk data. CoinDesk Index has also risen by 11%.

Inflows of over $400 million into spot ETFs on Thursday likely hid reports that bankrupt crypto lender Genesis was seeking permission to liquidate $1.6 billion in bitcoins. The spot ETFs saw over $400 million of inflows on Thursday, marking their best day for nearly a month.

The S&P 500 index, Wall Street’s benchmark stock market index, has risen for the fifth consecutive week and closed above $5,000 for the first time in history.

Greg Magadini is Amberdata’s Director for Derivatives. He says that the rise in artificial intelligence stocks has pushed the index up, and this bullish momentum bodes very well for the crypto markets.

It’s difficult to overvalue AI. AI is just at its beginning and adoption is exploding. What is your opinion of the future of AI technology? In my opinion, it’s certainly unknown. Crypto is also in a similar situation. It is likely to be a complement to AI technology, given the decentralized on-chain assets and future uses that are not yet known,” Magadini wrote in an email.

Magadini said that the investor appetite for risk in tech was good for crypto.

NVIDIA shares, up more than 40% this year, lead the AI-driven rally. According to some observers, stocks are expensive as the equity risk premium for the S&P500 has fallen to its lowest level since 2003.

To gauge the relative attractiveness, the equity risk premium compares projected corporate earnings growth to the yield on a 10-year U.S. Treasury bill or the so-called “risk-free rate”.

Stocks are expensive, and Treasury bills are cheap because of the sharp decline in risk premium. This does not necessarily indicate risk aversion that leads to a flight from stocks, cryptocurrencies and into bonds.

This measure allows us to see whether stocks (or Treasurys) are expensive or cheap. Magadini pointed out that another way to interpret this is the fact that there is a very strong risk-on attitude in the market.

Parikshit Miishra is the editor.