Bitcoin price rises above $22,000 to reach four-month high
Bitcoin surged past $22,000, its highest level since mid-September, as the broader cryptocurrency market continued its unexpected 2023 rally.
The largest cryptocurrency by market cap recently traded as high as $22,387, up 5.4% in 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 applied chapter. 11 bankruptcy protection late Thursday. (Genesis and CoinDesk are owned by Digital Currency Group.)
Edward Moya, senior market analyst for forex market maker Oanda, noted on Thursday that investors had priced in Genesis’ looming 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.
BTC has risen 11% in the past seven days and is up 34% for the year. ETH has jumped 12% in the past week and is up 37% since December 31st.
Crypto-related stocks also benefited from Friday’s rally: Exchange Coinbase ( COIN ) was recently up 10% while bitcoin miner Marathon Digital Holdings ( MARA ) rose 9%.
Traditional markets also rallied, with the S&P 500 index up 1.9%, as investors processed a series of mixed earnings reports from major banks.
This week’s larger-than-expected decline in the producer price index (PPI) indicated that the US central bank’s monetary policy hawk has tamed inflation and strengthened investors. The CME FedWatch tool currently shows that traders see about a 97% chance that the Federal Open Market Committee (FOMC) will raise interest rates by just 25 basis points (0.25 percentage point) at its next meeting in February – down from 50 basis point hikes in the December meeting .
Sheraz Ahmed, managing partner at STORM Partners, told CoinDesk that while recent macro data — “including a modest decline in inflation, declining wage and employment data and a seemingly weaker dollar” — has induced some relief in the market, 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 good feeling, but it should be treated with caution to avoid mistakes whether prices continue to rise or fall,” Ahmed said.
Oandas Moya said in a Friday note that if more tightening goes beyond the March meeting, “risky assets in general, including crypto, could be vulnerable to heavy selling pressure.”
