Bitcoin (BTC) 2023 rally continues, with the crypto now above $20,000 for the first time since the collapse of FTX in early November.
The largest cryptocurrency by market capitalization started the week near $17,000 after hovering in the mid-$16,000 region since mid-December. Now at $20,250, bitcoin is up more than 20% in the first two weeks of this year. Nevertheless, the crypto – which topped $65,000 in November 2021 – remains near the lower end of a brutal bear market.
In fact, according to Craig Erlam, senior market analyst at forex market maker Oanda, $20,000 was “once [considered] a troubling low, but now potentially represents a sign of revival.”
Ether (ETH) is also surging nicely, up more than 20% year-to-date and threatening $1,500 for the first time since early November.
The CoinDesk Market Index (CMI) is up 14% for the week.
Crypto-related stocks also benefited from this week’s rally: exchange Coinbase (COIN) was up 39% while bitcoin miner Marathon Digital Holdings (MARA) soared 76%.
Traditional markets were also higher for the week, with the S&P 500 rising more than 2% as Q4 earnings season began and US inflation numbers — though remaining elevated — continued to ease. “Optimism is fueled by the first monthly inflation decline in two and a half years and a sharp annual decline in both headline and core readings,” Erlum wrote.
Nicholas Colas, co-founder of market analysis firm Datatrack Research, wrote in a note that the US Federal Reserve’s policy still matters, but “the momentum of China’s reopening, rising US economic and corporate earnings, and positive real Rates will continue to matter.” There will be other issues as well. Attracting the attention of investors.”
“None of this guarantees that 2023 will be a good year for risk assets, but it does say that it will be much more common than last year,” Colas said.