Bitcoin has hit a two-month high over the weekend as crypto continues to rebound from its crash that followed the collapse of industry titans FTX and Alameda Research. It seems as though looming macroeconomic concerns may soon begin to eat crypto’s gains.
Bitcoin traded for as high as $21,325 on Sunday. This is the first time it has gotten as high since November 5,the day before the CEO of Binance Changpeng Zhao said that his exchange sold all its holdings in rival cryptocurrency exchange. This followed a report on the questionable finances at FTX and Alameda and set forth the firm’s unraveling.
Also, the combined market value of all cryptocurrencies passed the $1 trillion mark for the first time since early November and it was $1.02 trillion on Monday.
Bitcoin, the world’s most valuable cryptocurrency, has gained slightly and is now trading at $21,108. Bitcoin is still up 27% since the start of 2023. Ethereum, the second most valuable cryptocurrency by market value, is up 30% to date.
This jump has come during a broader boom for equities, with the S&P 500 up 4.6%in 2023. This and many other data indicates that global inflation is cooling. Investors hope that this will cause the Federal Reserve to take its foot off the interest rate hike pedal.
Bitcoin reached its all time high of over $65,000 in November 2021. This was while the crypto market peaked at over $3 trillion at that time. Digital assets fell in value in 2022 during a downturn caused by several interest rate hikes. This caused many investors to turn away from risk-sensitive assets. It also led to a breakdown in trust in the cryptocurrency industry as several major crypto players went bankrupt.
Even though it has reached a new high, Bitcoin is still down 51% when compared to its high in 2021.
This recent spike in equity prices might soon hit a stop and end up looking premature. The market is behaving as if it is in an early cycle recovery phase. However the Fed has not concluded hiking yet.
