The cryptocurrency market is slowly recovering from the aftermath of FTX’s collapse in 2022. A New York jury’s recent verdict, finding former FTX CEO Sam Bankman-Fried guilty of defrauding customers, marked a pivotal moment for the industry. Despite this setback, the crypto space is experiencing a resurgence, buoyed by Bitcoin’s impressive performance and growing optimism surrounding spot Bitcoin Exchange-Traded Funds (ETFs).
Bitcoin, the cryptocurrency market’s barometer, has seen a resurgence in 2023. After facing a 65% drop in value last year, Bitcoin has more than doubled its price, making this year the most prosperous since 2020. The digital currency, which reached an all-time high of $69,000 in 2021, plummeted to under $16,000 in November 2021 due to a series of market challenges, including the collapse of stablecoin terra USD.
The renewed optimism in the crypto market has been fueled by the anticipation of regulatory approval for spot Bitcoin ETFs. Major financial institutions, including BlackRock, have submitted applications to the U.S. Securities and Exchange Commission for launching Bitcoin ETFs. If approved, these ETFs could attract billions of dollars from institutional investors, providing a significant boost to the cryptocurrency market.
While the crypto market remains volatile, the recent stability in Bitcoin prices after the FTX collapse has attracted both seasoned and new investors. However, the market has seen a resurgence in price swings since mid-October, triggered by speculation around the approval of spot Bitcoin ETFs.
Despite the challenges, the overall crypto market has shown resilience. After hitting a two-year low of $796 billion in 2022, the market’s value has rebounded, standing at $1.35 trillion as of Thursday. This recovery is attributed to Bitcoin’s rally, which has instilled confidence in investors and contributed to the market’s positive trajectory.
Market analysts remain cautiously optimistic, acknowledging the significance of the ongoing developments. The recent decision by both the U.S. Federal Reserve and the Bank of England to maintain stable interest rates has also provided a sense of stability, indicating a possible plateau for rate hikes.
