Bitcoin stages a $1 trillion comeback
By Anna Cooban, CNN
London (CNN) — Bitcoin is back with a $1 trillion dollar bang.
The value of the world’s most popular cryptocurrency has more than tripled to $52,000 since November 2022. That year was marked by the high-profile implosion of crypto exchange FTX, which triggered liquidity crises at several smaller crypto firms.
Following bitcoin’s gains in 2023, investors have returned in droves in recent weeks, pushing the asset’s market capitalization above $1 trillion for the first time since its 2021 heyday, based on data from CoinMarketCap. In contrast to traditional currencies, the supply of bitcoin is limited and is expected to peak in 2140, according to the price-tracking website for cryptocurrencies.
Money flows into bitcoin have been boosted by the recent launch of exchange-traded funds that invest directly in the cryptocurrency and which have made it easier for retail investors to put money into the asset. The value of bitcoin has risen nearly 13% since January 10, when US regulators gave the green light to investment firms wishing to offer such funds.
Bitcoin remains far from its all-time high of $69,000, reached in November 2021, but industry players who recently spoke to CNN expect it to keep climbing this year and that peak may be surpassed.
Part of the bullishness is down to bitcoin’s upcoming “halving” — a feature of its design that automatically halves the rate of new coins entering circulation, an event taking place roughly every four years.
“Every halving has historically resulted in some sort of bullish price action,” Gareth Rhodes, former deputy superintendent at the New York State Department of Financial Services, said last week.
Bitcoin’s recent surge, however, won’t have changed an inconvenient truth for investors: the asset is risky, prone to wild swings in value and is still very much under regulators’ microscope.
In January, before approving bitcoin exchange-traded funds, Gary Gensler, chair of the US Securities and Exchange Commission, said on X: “A number of major platforms & crypto assets have become insolvent and/or lost value. Investments in crypto assets continue to be subject to significant risk.”
The-CNN-Wire
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