Bitcoin Recaptures $20,000, Leading As Broad Crypto Rally Continues

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Bitcoin (BTC)’s 2023 surge continues, with the crypto now surpassing $20,000 for the first time since FTX collapsed in early November.

The largest cryptocurrency by market cap started the week near the $17,000 mark after hovering around $16,000 since mid-December. Now at $20,250, bitcoin has gained over 20% in the first two weeks of this year. Still, the crypto that surpassed $65,000 in November 2021 remains near the bottom of a brutal bear market.

Indeed, $20,000 once [was] seen as a worrying low but now potentially represents a sign of recovery, according to Craig Erlam, senior market analyst at forex market maker Oanda.

Ether (ETH) is also doing well, up more than 20% year-to-date and threatening $1,500 for the first time since early November.

The CoinDesk Market Index (CMI) rose 14% for the week.

Crypto-related stocks also benefited from the rally this week: Exchange Coinbase (COIN) rose 39% while bitcoin miner Marathon Digital Holdings (MARA) jumped 76%.

Read more: Left for Dead Crypto Names roars higher as Bitcoin rebounds

Traditional markets were also higher for the week, with the S&P 500 gaining more than 2% at the start of the fourth quarter earnings season and as US inflation numbers, while still elevated, continued to decline. The optimism was compounded by the first monthly decline in inflation in two-and-a-half years and further sharp annual declines in headline and core numbers, Erlam wrote.

Nicholas Colas, co-founder of market analysis firm DataTrek Research, wrote in a note that US Federal Reserve policy is still important, but “other issues like the reopening of China, the pace of economic and corporate earnings growth in the United States and positive real rates are jostling for the attention of investors.”

None of this guarantees that 2023 will be a good year for risk assets, but it does mean it will feel much more normal than last year, Colas said.

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