Bitcoin crosses $30,000 for the first time in 2023
Bitcoin (BTC-USD) crossed $30,000 on Tuesday, hitting the highest level for the world’s largest cryptocurrency in 10 months.
It briefly hit $30,301 around 2:20 a.m. ET Tuesday before easing later in the morning. By 8:00 AM ET, bitcoin was changing hands at $30,027, up 6.2% in the past 24 hours. The last time the digital currency was this high was on June 6, 2022.
The bitcoin rally lifted other crypto assets and companies on Tuesday, including shares of cryptocurrency exchange Coinbase Global (COIN) and the price of the world’s second largest cryptocurrency, Ether (ETH-USD), as well as shares of bitcoin miners Marathon Digital (MARA) and Riot (RIOT). .
Bitcoin still has a way to go to reach the heights it has scaled during the peak. It is still trading 23% below where it was a year ago.
The rapid rise of digital currencies is one of the year’s big market surprises after a crash in 2022 cost investors billions as higher interest rates and inflation eroded the value and appeal of risky assets. Several crypto players filed for bankruptcy, including FTX in November. FTX’s former CEO Sam Bankman-Fried now faces criminal charges for stealing billions in FTX customer funds and misleading investors.
“It’s a bounce back from the really poor performance we saw in 2022,” VettaFi head of research Todd Rosenbluth told Yahoo Finance.
What gave the market extra momentum this year was a banking crisis in March that brought down three lenders, including two that specifically serviced cryptocurrency clients.
Since March 10, the day regulators seized Silicon Valley Bank in the second largest bank failure in US history, bitcoin has climbed $9,500 higher with a gain of more than 30%. Ether (ETH-USD) is up more than 29%. According to Coinmarketcap, the total value of all crypto assets is up more than 24% during that period, as of Tuesday at 8:00 a.m. ET.
Some investors chose to seek out bitcoin as a safe haven from the perceived instability in banking. Others predicted that the Fed would have to cut interest rates in response to the crisis, prompting more flows into alternative risk assets.
However, the banking crisis has also significantly limited liquidity in the crypto market according to data collected by Kaiko Research. Because investors now have fewer banking partners to help move funds from dollars to cryptocurrencies and vice versa, analysts have argued that it is much easier to manipulate bitcoin’s price with a large order.
Crypto’s 2023 comeback is unfolding itself as Washington regulators step up efforts to rein in the market.
The Securities and Exchange Commission has issued 11 enforcement actions since early January against crypto firms and individuals, while delivering formal letters to Paxos, DeFi Exchange Sushi and Coinbase Global warning the agency to initiate an enforcement action. Coinbase is the largest US crypto exchange.
Coinbase shares are up 86% year-to-date, but remain depressed at two-thirds below their year-ago value. Marathon Digital and Riot have both more than doubled since the start of 2023, but still trade 60% and 45% below their year-ago price.
Another regulator, the Commodities and Futures Trading Commission, has also sued crypto exchange Binance and its CEO Changpeng Zhao for allegedly selling derivatives backed by digital assets to US customers despite not being registered to do so.
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