Bitcoin soared past $22,000, its highest level since last September, as the broader cryptocurrency market continued its unexpected 2023 rally.
The largest cryptocurrency by market capitalization was recently trading as high as $22,387, up 5.4% over the previous 24 hours, shrugging off the announcement late Thursday that Genesis Global Holdco LLC, the holding company of troubled cryptocurrency lender Genesis Global Capital, had filed for Chapter 11 bankruptcy protection late Thursday.
Edward Moya, senior market analyst for foreign exchange market maker Oanda, noted on Thursday that investors had priced in Genesis problems. The company has been swept up in the fallout from the collapses of crypto hedge fund Three Arrows Capital last spring and, more recently, crypto exchange giant FTX.
In the last 7 days, Bitcoin has grown 11%, and since 2023, its value has increased 34%. Ethereum has risen 12% in the past week and is up 37% since the start of 2021.
Traditional markets also edged up, with the S&P 500 index up 1.9%, as investors processed a flurry of mixed earnings reports from big banks.
This week’s larger than expected decline in PPI indicated the U.S. Federal Reserve’s monetary hawkishness has been taming inflation, buoying investors. The CME FedWatch tool currently shows that traders see roughly a 97% chance that the Federal Open Market Committee will raise rates by just 25 basis points at its next meeting in February.
Sheraz Ahmed, managing partner at STORM Partners, told CoinDesk that while recent macro data “including a modest pullback in inflation, downwards-trending wage and employment data and a seemingly weaker dollar” have induced some market relief, how the Fed will handle monetary policy while balancing economic data and recession fears will have a big impact on the market overall.
“Post-rally euphoria is always a great feeling but it should be treated with caution to avoid mistakes whether prices continue to rise or fall,”
Ahmed said.
