The value of Bitcoin has surprisingly increased since January 10, and it appears that it will continue to grow in the coming weeks—exceeding its value before the crypto winter.
- Bitcoin has rallied in the past two weeks, with its value increasing to nearly $23,000 at the time of writing, an increase in valuation of more than $6,000—or 35%.
- While it hasn’t returned to the value peaks it saw at over $60,000 in November 2021, Bitcoin has mainly stayed below $17,000 since the collapse of FTX in early November, which crashed the entire cryptocurrency market.
- Analysts see the current trend topping off between $24,800 and $25,200, although some expect it to raise above $30,000 in the long term, Barron’s reports.
Why It’s Important
Bitcoin is a highly speculative currency, and its value is rooted largely in the idea of its value, as is any form of currency not strictly backed by a physical substance like gold. And that is good news for Bitcoin because crypto evangelists are loyal and held onto their Bitcoin through multiple crashes in the past two years when selling off their crypto would’ve been safer.
The collapse of FTX wounded the crypto market, but it didn’t push out crypto’s most loyal investors, who continue to hold their Bitcoin.
As CryptoNews notes, that decline in value was likely a temporary fluke. Bitcoin allegedly still has a $300 billion market cap. Even with the crypto markets still reeling from exchange collapses, the market is still healing from the crash, and the value currently exceeds its valuation in October.
Crypto’s ongoing bull market has coincided with general improvements in the stock market, Barron’s notes. Inflation is cooling, and the Federal Reserve is likely to begin chilling its monetary policy into 2023, which frees investors to feel more comfortable with riskier investments.
The overall mood surrounding cryptocurrency—that the collapse of FTX and the crypto winter are heralding the demise of crypto—may be becoming more optimistic.
“The Genesis debacle has been playing out for a while and is likely priced in already. FTX, on the other hand, has already had a significant impact on many investors, on market psychology, and on the prices of several toxic assets. It should be noted, however, that the price on bitcoin itself is quite limited since FTX didn’t have any on their balance sheets,” Quantum Economics CEO Mati Greenspan told CNBC.