One year after FTX’s ill-fated implosion, Bitcoin (BTC), the largest cryptocurrency by market capitalization, has picked itself from the dust to reach new highs, proving its mettle against a drawn-out bear market.
In the weeks that followed FTX’s collapse, BTC’s price tumbled to lows of $15K amid an industry-wide crackdown by regulators and a massive flight of capital from the virtual currency sector. Twelve months after the black-swan incident, it appears BTC is ready to forge ahead with prices hovering around the $35K mark, up by 70% since FTX’s collapse.
Bitcoin’s road to recovery was a slow-and-steady affair, starting in early 2023 following a surge to $21,000 in January that wiped out all FTX-related decline. Macroeconomic sentiments around inflation saw BTC steadily claw its way up the ladder, punctuated by episodes of bearish sentiments.
Apart from macroeconomics, experts have pointed to Bitcoin’s growing utility as a major factor in its spike in value despite bearing the brunt of the FTX incident.
“The price of Bitcoin, whether it’s 200K or 400K, won’t be just due to speculation. It will be because people see the value in Bitcoin’s utility,” said Jason Fang, Managing Partner at Sora Ventures.
Fang also pointed out the decentralization features of Bitcoin as a contributory factor for the price surge, with industry participants drawn by the network’s reliability compared to other blockchain networks. For context, Solana (SOL) and Ethereum (ETH) gained 26% and 17% since FTX’s collapse compared to Bitcoin’s impressive rebound in the same period.
“Bitcoin has proven its resilience, especially after the FTX implosion – it didn’t go to zero, showing it’s not just some scam chain. It’s here to stay,” Fang remarked.
As Bitcoin steels itself for a solid end to 2023, FTX’s embattled founder, Sam Bankman-Fried, faces the gloomy prospect of over 100 years in jail after being found guilty of fraud charges in a trial that held the virtual currency industry spellbound.
ETFs may change the game for Bitcoin
Experts argue that a planned approval for a spot Bitcoin ETF may be the last piece of the puzzle to send the asset’s price to stratospheric levels.
Enthusiasts are banking on a regulatory nod by the Securities and Exchange Commission (SEC) in November amid plans by Hong Kong and other jurisdictions to launch their ETF products.
Others are eyeing a bullish stance by institutional investors, rate cuts by the Feds, and an incoming halving event as proof of brighter days ahead for the asset class.
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