Bitcoin Retakes $20K, Leading as Broad Crypto Rally Continues
Bitcoin's (BTC) 2023 surge continues, with the crypto now above $20,000 for the first time since the FTX collapse in early November.
The largest cryptocurrency by market capitalization started the week near the $17,000 mark after hovering in the mid-$16,000 area since mid-December. Now at $20,250, bitcoin has gained more than 20% in the opening two weeks of this year. Still, the crypto – which topped $65,000 in Nov. 2021 – remains near the low end of a brutal bear market.
Indeed, $20,000 “once [was] deemed a disturbing low but now potentially represents a sign of a revival,” according to Craig Erlam, senior market analyst at foreign exchange market maker Oanda.
Also moving nicely higher is ether (ETH), ahead more than 20% year-to-date and threatening $1,500 for the first time since early November.
The CoinDesk Market Index (CMI) rose 14% for the week.
Crypto-related stocks also benefited from the rally this week: Exchange Coinbase (COIN) was up 39% while bitcoin miner Marathon Digital Holdings (MARA) surged 76%.
Traditional markets were also higher for the week, the S&P 500 gaining more than 2% as Q4 earnings season began and as U.S. inflation numbers - though remaining elevated – continued to move lower. “Optimism has been compounded by the first monthly inflation decline in two-and-a-half years and further sharp annual declines in both the headline and core readings,” Erlam wrote.
Nicholas Colas, co-founder of the market analysis firm DataTrek Research, wrote in a note that the U.S. Federal Reserve's policy still matters, but "other issues like China’s reopening, the pace of US economic and corporate earnings growth, and positive real rates will jostle for investors’ attention."
“None of this guarantees that 2023 will be a good year for risk assets, but it does say it will look a lot more normal' than last year,” said Colas.