Bitcoin is back in its parabolic-rally phase
At the close of February 2024, the world's financial markets stood at a threshold — global equities nearing all-time highs as inflation's long grip slowly loosened across Europe and America, while bitcoin, reborn through institutional legitimacy, surged nearly 50% in a single month. These twin movements — one gradual and reassuring, the other electric and speculative — reflected a civilization still finding its footing after years of monetary disruption. The day's true fulcrum, however, rested on a single data release: the Fed's preferred inflation measure, whose reading would either open the door to rate cuts or remind markets that patience, not celebration, remained the order of the season.
- Bitcoin's 50% February surge — its best month in over three years — is no longer a fringe phenomenon; spot ETF approvals have funneled $420 million in a single day from institutions like BlackRock and Fidelity, pulling the asset toward its 2021 peak.
- European inflation is retreating on multiple fronts — Germany, France, and Spain all posted declining price growth — giving equity markets the quiet confidence needed to push toward four consecutive months of gains.
- Beneath the optimism, Wall Street futures dipped and traders held their breath, with the Fed's PCE inflation index looming as the single data point capable of reshuffling rate-cut timelines and triggering broad market selloffs.
- China's blue-chip stocks bounced nearly 2% overnight, riding anticipation ahead of the National People's Congress, where a growth target and potential stimulus measures could further reshape global capital flows.
- The Bank of Japan signaled a possible exit from its ultra-loose monetary policy, strengthening the yen and adding yet another variable to a global market landscape already stretched taut between hope and uncertainty.
World stock markets were pressing against all-time highs on Thursday, carried by a steady drip of encouraging inflation data from across Europe. Germany, France, and Spain all reported declining price growth — not dramatic reversals, but the kind of incremental relief that markets had been waiting two years to feel. European equities were on course for a fourth straight monthly gain, and major global indexes had reclaimed peaks not seen since before the Federal Reserve's rate hikes and Russia's invasion of Ukraine reshaped the world in early 2022.
The more electric story, however, belonged to bitcoin. The cryptocurrency gained 3.5% on the day and closed February up nearly 50% — its strongest monthly performance since 2020 — trading around $62,315 and within striking distance of its late-2021 peak near $69,000. The engine behind the rally was institutional: newly approved spot bitcoin ETFs in the United States had drawn $420 million in a single day, with funds run by Grayscale, Fidelity, and BlackRock leading the charge. Analyst Matt Simpson noted the paradox — a rally this steep would normally signal a bubble's final gasp, but bitcoin had already survived its own collapse in 2022 and was now riding a wave of genuine institutional legitimacy.
In Asia, Chinese blue chips jumped nearly 2%, buoyed by investor positioning ahead of the National People's Congress, where China's annual growth target and potential stimulus measures were expected. The CSI 300 posted its best monthly gain since November 2022, up 9.3% for February.
Yet caution threaded through the optimism. Wall Street futures pointed slightly lower as traders awaited the Federal Reserve's preferred inflation gauge — the personal consumer expenditures index — whose reading would determine whether rate cuts could arrive as early as June or be pushed further out. Strategists warned that equities and the dollar had grown tightly correlated, meaning a disappointing print could ripple across asset classes simultaneously. The Bank of Japan added further complexity, with a board member hinting at an exit from ultra-loose monetary policy, strengthening the yen and raising the prospect of a historic rate shift as early as March or April.
The day felt suspended between relief and reckoning — inflation easing, markets rising, bitcoin surging — but everything hinging on a single number that, when released, would either validate the rally or remind the world that the path back to normalcy was still unfinished.
The world's stock markets were knocking on the door of all-time highs on Thursday, buoyed by a steady stream of inflation data suggesting that the worst of the price surge that began in 2022 was finally behind us. Across Europe and the United States, the numbers told a consistent story: prices were rising more slowly than they had been. Germany's inflation continued its downward march. France reported consumer prices up 3.1 percent from a year earlier, down from 3.4 percent in January. Spain saw annual inflation drop to 2.9 percent, a full point lower than the month before. These weren't dramatic reversals, but they were the kind of incremental good news that markets had been starved of for two years.
The real electricity in the markets, though, was coming from somewhere else entirely: bitcoin. The cryptocurrency had climbed nearly 50 percent in February alone, its best month since 2020, and was trading around $62,315 in European markets—close enough to its late 2021 peak of just under $69,000 that traders could almost taste it. On Thursday alone, bitcoin gained 3.5 percent. The surge was being driven by something concrete and institutional: the approval and launch of spot bitcoin exchange-traded funds in the United States earlier this year. These vehicles had opened the door for ordinary investors and large institutions to gain exposure to bitcoin without the friction and complexity of buying it directly. On Tuesday alone, the ten largest spot bitcoin ETFs had pulled in $420 million—the most in nearly two weeks. The three biggest funds, run by Grayscale, Fidelity, and BlackRock, were seeing volumes spike.
Matt Simpson, a senior market analyst at City Index, captured the strangeness of the moment. In any other market, he said, a rally this steep would be dismissed as a bubble in its final, euphoric stages—the kind of thing sensible investors avoid. But bitcoin was different. It had been through its own winter, a brutal collapse in 2022 that had wiped out fortunes and left the entire asset class for dead. Now it was back in what Simpson called its "parabolic-rally phase," riding a wave of institutional legitimacy and fresh capital.
European stock markets were on track for their fourth consecutive monthly gain, and the major global indexes had hit all-time peaks for the first time since early 2022—before the Federal Reserve began signaling higher interest rates and Russia invaded Ukraine, twin shocks that had sent inflation spiraling upward and markets into a long funk. The recovery had been gradual but steady. In Asia overnight, Chinese blue chips had jumped nearly 2 percent, bouncing back from a slide the day before. Investors were positioning themselves ahead of next week's National People's Congress, where China's growth target for the year would be announced, and there was hope that more aggressive stimulus measures were coming. The CSI 300 index had posted its best monthly performance since November 2022, up 9.3 percent for February.
But there was caution in the air too. Wall Street futures were pointing downward—the S&P 500 down 0.25 percent, the Nasdaq down 0.3 percent—as traders waited for the main event of the day: the release of the Federal Reserve's preferred inflation gauge, the personal consumer expenditures price index. The stakes were high. Earlier in the year, markets had been betting on a rate cut as soon as March. That expectation had been pushed back to June as inflation proved stickier than hoped. Geoff Yu, a senior strategist at BNY Mellon, put it bluntly: "We need a super, super, super strong PCE print for people to add to dollar risk." The dollar and equities had become tightly correlated this year, he noted, which meant that if stocks began to fall, "a lot of other things will come off too."
The Bank of Japan had added its own wrinkle to the day's trading. A BOJ board member had suggested in a speech that the central bank needed to consider exiting its ultra-easy monetary policies—ending negative interest rates and yield curve control. The yen had strengthened overnight on the news. Analysts were now expecting the BOJ to move away from negative rates in April, with a possibility of a move in March. Oil prices, meanwhile, had extended their losses from the previous session after a larger-than-expected build in U.S. crude stockpiles raised questions about demand. Brent crude fell 0.4 percent to $83.37 a barrel, though it was still up about 2 percent for the month. Gold and copper had both dipped slightly.
The moment felt balanced on a knife's edge. Inflation was easing, which was good news. But the path forward for interest rates remained uncertain, and markets had become so interconnected—equities tied to the dollar, the dollar tied to rate expectations, everything tied to everything else—that a surprise in any direction could trigger a cascade. The PCE number, when it came, would either confirm that the Fed could begin cutting rates soon, or it would suggest that rates needed to stay elevated longer. Either way, it would reshape expectations across every market on the planet.
Notable Quotes
We need a super, super, super strong PCE print for people to add to dollar risk. If you look at the equity markets, dollar/yen there have been a lot of correlated trades this year.— Geoff Yu, senior FX and Macro strategist at BNY Mellon
If this were any other market, it would likely be in the 'blow-off top - don't go near that bubble' category. But bitcoin is back in its parabolic-rally phase.— Matt Simpson, senior market analyst at City Index
The Hearth Conversation Another angle on the story
Why does bitcoin's surge matter if it's just one asset class? Isn't it always volatile?
It matters because of what enabled it. These spot ETFs opened the door to institutional money—Fidelity, BlackRock, ordinary retirement accounts. That's not speculation anymore. That's legitimacy.
But the analyst you mentioned called it a "parabolic rally." Doesn't that sound dangerous?
It does. And he acknowledged that. But he also said bitcoin is different because it's been through its own winter. The 2022 collapse was so brutal that what's happening now feels like a genuine recovery, not just hype.
The inflation numbers seem good. Why are markets still cautious?
Because inflation is only half the story. The real question is what the Fed does next. If inflation is truly beaten, they can cut rates. If it's not, rates stay high. That one number—the PCE—could change everything.
You mentioned the yen strengthening. Why does a Japanese central bank comment move currency markets?
Because the BOJ has been holding rates negative for years. If they're finally thinking about exiting that, it signals a major shift in global monetary policy. Everyone's positioned for one scenario, and suddenly the rules might change.
So what happens if the PCE comes in hot?
Equities fall, the dollar strengthens, and all those correlated trades unwind. Bitcoin might fall too, despite all this momentum. Everything's connected now in ways it wasn't before.