Is a crypto bull market coming? Bitcoin roars past $30k as investors bet on end to rate hikes
Bitcoin has roared past the $30,000 dollar mark for the first time since June last year today as investors pour back into crypto in a bet on the end of rising interest rates.
The flagship cryptocurrency climbed above $30,000 dollars early this morning and was trading at $30,103 at 10:00am.
Bitcoin prices have now surged more than 70 per cent since the start of the year after a dismal 2022 in which over a trillion dollars was wiped from the value of the wider crypto market.
Sharp rate hikes and soaring inflation caused investors to scramble for steadier ground last year triggering a series of high profile crypto implosions, including of Sam Bankman-Fried’s FTX exchange.
However, investors have poured back into Bitcoin and Ethereum in 2023, the two most valuable cryptocurrencies, in anticipation of an end to the period of rising interest rates. Ethereum has risen some 60 per cent since the start of the year to trade at $1,920.
Mirva Anttila, director of digital assets research at WisdomTree said investors were betting on a winding down on a period of sharp rate hikes.
“While the US Federal Reserve is still raising interest rates, the market seems to expect that the recent bank failures (Silvergate Bank, Signature Bank, Silicon Valley Bank, Credit Suisse) will lead to central bank easing,” she said.
“Lower interest rates would benefit long-maturity assets, such as digital assets. Moreover, several traders have been caught off-guard and short-sellers expecting more downside in digital assets have had to liquidate positions leading to higher prices.”
Antilla predicted the market was on the cusp of a fourth “major bull market” as investors flood back into the space.
Simon Peters, a digital asset analyst at eToro, added that investors had “turned bullish” on the cryptoasset as markets look to price in the end of rising interest rates in the US and beyond.
“Momentum has steadily built for bitcoin as investors digest macroeconomic shifts in data,” he added. “The next one markets will be watching is US inflation, due tomorrow. If inflation continues to recede we could see some consolidation above $30,000.”
The recent bump still leaves bitcoin well shy of an all time high of $68,790, recorded in late 2021.