Bitcoin Extends New Year Rally, Crosses $24,000 Briefly
While Bitcoin may not reach its previous all-time high of $69,000 before the end of 2023, some investors believe that crypto has bottomed out and would begin recovering.
Building on its new year rally, the price of Bitcoin crossed the $24,000 threshold on Wednesday night. The upsurge corresponded with a gain in general tech stocks and a drop in the US dollar currency Index (DXY) and US Treasury yields.
Bitcoin price has remained closely correlated to the tech-heavy Nasdaq stocks. Its latest rally comes after the Federal Reserve raised its benchmark interest rate by 25 basis points. The Fed Chairman, Jerome Powell, also announced that a disinflationary process has commenced.
Consequently, many investors took the announcement as a dovish stance, taking on more risk in the market in hopes that inflation is set to fall. However, Yuya Hasegawa, an analyst at the crypto exchange Bitbank believes that the crypto market is not ready for such a rally.
Hasegawa noted that the inflation rate was still high even if a deflationary process had commenced. Also, he cited that the FEC would need more evidence before concluding that inflation is nearing their 2% target.”
What the New Year Rally Means for Bitcoin in 2023
While Bitcoin may not reach its previous all-time high of $69,000 before the end of 2023, some investors believe that crypto has bottomed out and would begin recovering by the end of the year. For example, SkyBridge Capital founder, Anthony Scaramucci, expects Bitcoin may hit between $50,000 and $100,000 in two to three years. Scaramucci believes widespread adoption could be the catalyst for such growth.
So far, Bitcoin has gained 40% since the beginning of 2023. It’s also been the best January for Bitcoin since January 2013. Nevertheless, fears of a recession mean institutional investors continue to observe the market from the sidelines. The fear of a global recession has doused any hopes of an immediate rally despite positive signs of recovery from most indicators.
According to venture capitalist, Bill Tai, Bitcoin could fall to $12,000 before jumping back up. This is because Bitcoin price is expected to be affected by macroeconomic trends like the inflation rate in the short term. Whatever the case may be, the recent upsurge in Bitcoin prices is a good sign for the entire crypto industry. At the time of writing, the coin was trading at $23,551.64, according to CoinMarketCap.