Bitcoin is on track for its biggest weekly gain since October

Bitcoin is on track for its best weekly gain since last October, helped by a return to risk appetite in global markets more broadly.

The largest cryptocurrency by market cap is up more than 13% in a week as of 11:50am on Friday in Singapore – and if that move continues, it would be the biggest gain of such a period since 2021.

Other tokens such as Ether, Avalanche and Solana have also had strong growth in recent days, helping to bring back the total market value of cryptocurrencies of more than $1 trillion, according to CoinGecko data.

The stock rally provides much-needed relief for battered virtual coins amid a positive correlation between the two asset classes. Bitcoin remains more than 50% lower in 2022, hit by tighter monetary policy and a string of explosions in the digital asset sector, which is still sobering up after using leverage.

"Risk markets are rising across the board," and so "it's no surprise that cryptocurrency is trading higher," said Ben McMillan, chief investment officer at IDX Digital Assets. "After a cascade of bad news and major liquidations, many crypto investors are still sitting on the sidelines waiting for the next shoe to fall."

A flurry of economic risks and the threat of greater deleveraging remain a problem in crypto. The news that customers of bankrupt broker Voyager Digital Ltd. probably won't get all their money back has sparked a new kind of fear among investors who have typically been able to digest large market downturns. 

"Many institutional holders of bitcoin may be particularly sensitive to the overall way the economy moves," said Jared Madfes, a partner at Tribe Capital.  

If friday's U.S. jobs report "comes back really weak, inflation will come back even worse, and it looks like a number of geopolitical issues that are affecting the prices of a number of these major assets of the economy are not improving, I can't imagine this is a short-term bullish for bitcoin," Madfes said.