After getting pummeled by losses for the better part of last year, bitcoin and other cryptocurrencies are rallying in 2023, prompting speculation that the so-called crypto winter — the digital asset world’s equivalent of a bear market — is over.
Bitcoin, the world’s most popular crypto, is up 25% over the past month, hovering above $20,000 for the first time since November, when the implosion of Sam Bankman-Fried’s trading platform FTX sent shock waves through the industry. Ethereum, the No. 2 crypto, is up more than 30% over the past month, trading above $1,500 on Monday.
“Wall Street is very confident that the end of the Fed’s tightening cycle is upon us and that is providing some underlying support for crypto,” wrote Ed Moya, a senior market analyst at Oanda, on Friday. “Unless we hear some strong hawkish pushback from the Fed or if commodity prices surge, crypto traders should not be surprised if Bitcoin is able to extend its recent gains.”
Bitcoin peaked more than a year ago, in November 2021, just shy of $69,000. Two months ago, as FTX contagion gripped the digital asset market, bitcoin plummeted to a two-year low of $15,480.
While US stock and bond markets are closed Monday in observance of Martin Luther King, Jr. Day, cryptocurrencies trade 24 hours a day, seven days a week.