London
CNN
—
Bitcoin is back with a $1 trillion rally.
The value of the world's most popular cryptocurrency has more than tripled since November 2022 to $52,000. The year was marked by the high-profile collapse of cryptocurrency exchange FTX, which triggered a liquidity crisis for several smaller crypto companies.
Bitcoin's 2023 rally has seen investors return in droves in recent weeks, pushing Bitcoin's market capitalization above $1 trillion for the first time since its heyday in 2021, according to data from CoinMarketCap. In contrast to traditional currencies, Bitcoin's supply is limited and is expected to peak in 2140, according to cryptocurrency price tracking websites.
The inflow into Bitcoin has been fueled by the recent launch of exchange-traded funds (ETFs) that invest directly in cryptocurrencies, making it easier for retail investors to put money into Bitcoin assets. Bitcoin's value has risen nearly 13% since January 10, when U.S. regulators gave the green light to investment firms willing to provide such funds.
Bitcoin is still a long way from the all-time high of around $69,000 it hit in November 2021, but industry insiders who recently spoke to CNN said the rally could continue this year and potentially surpass that peak. I predict that.
Part of the bullishness lies in Bitcoin's upcoming “halving.” This is a design feature of Bitcoin that automatically halves the rate of new coins entering circulation, an event that occurs approximately every four years.
“Historically, halvings have always resulted in some bullish price action,” Gareth Rose, a former deputy superintendent at the New York State Department of Financial Services, said last week.
But Bitcoin's recent rally won't change an inconvenient truth for investors. That means Bitcoin is risky, volatile in value, and still subject to regulatory scrutiny.
In January, before approving a Bitcoin exchange-traded fund, U.S. Securities and Exchange Commission Chairman Gary Gensler said: said in X: “Many major platforms and crypto assets have gone bankrupt or lost value. Investing in crypto assets remains at significant risk.”
