Bitcoin Hits $28.5k as Bull Rally Gains Pace
Bitcoin is having a great start to 2023, marking a turnaround from a year-long decline. The leading cryptocurrency has surged by almost 72% to $28,500 this year, representing its best quarterly gain in two years, and its market value has also increased to $542 billion.
This rally has also put Bitcoin ahead of the second-largest cryptocurrency by market value, Ethereum (ETH), which appears to be on track for a 50% quarterly gain. Gold, on the other hand, has added over 7% while the tech-heavy Nasdaq index has rallied 15%.
Is it down to Fed Pivot?
The rebound has been attributed to the speculation that central banks, led by the Federal Reserve (Fed), will abandon their aggressive rate increases in response to recession signals. The Fed pivot expectations strengthened early this month after three US banks collapsed, and the central bank launched emergency funding programs to arrest panic in the banking sector.
The central bank’s balance sheet has also recently expanded by $300 billion, undoing months of quantitative tightening. This development has led traders to believe that the Fed will begin an easing cycle in June with a 25 basis point rate cut.
And no doubt Bitcoin is still seen as a risk asset to institutional investors, but among all risk assets Bitcoin stands out as being the most sensitive to liquidity swings.
What’s more, the surge in Bitcoin’s price should also be attributed to the appeal of sound money assets like gold and Bitcoin, which are benefitting from the liquidity injections. And as Paul Tudor Jones said, Bitcoin is the fastest horse and so it should benefit most from fresh injections of liquidity.
MicrosStrategy Remains Bullish as Ever
MicroStrategy added 6,455 Bitcoin to its already impressive holdings as we announced yesterday. The company now has 138,955 BTC, making it the largest corporate holder of Bitcoin worldwide. This is despite the benchmark cryptocurrency being down nearly 61% from its historic high of $69,044 set in November 2021.
There was much criticism of MicroStrategy last year from the macro space, but their unwavering belief in Bitcoin is speaking for them.
Bitcoin (BTC) Price Remains Bullish
So far 2023 has been a great year for Bitcoin (BTC). And while its too early to talk about new ATH, the pivot from the Fed and clearer regulations that are on the way should be good for Bitcoin. Some believe the US govt is trying to choke it off at the FIAT onramps, but even though it’s doubtful they would cut it off completely, even that scenario could be bullish for Bitcoin.