Bitcoin has had a stellar start this year, with an almost 40% rise so far, even though crypto lender Genesis filed for bankruptcy last week, only months after digital asset exchange FTX imploded in November. In this installment, I’ll break down what’s driving the largest cryptocurrency’s rally.
Meanwhile, bitcoin was heavily shorted in November and December after FTX’s collapse. As the crypto’s price rose unexpectedly in January, some short sellers were forced to close their positions and buy bitcoin, pushing the crypto’s price even higher. The fear and panic in the crypto market may be easing slightly in January, with several signals in the derivatives market suggesting a comeback of institutional interest. The spot price of bitcoin is lower than the futures prices, showing that traders believe bitcoin’s price will rise, according to data from several exchanges.
The macroeconomic environment remains challenging, with still high inflation and a possible recession on the way at least in the U.S. It is also unclear how Genesis’s bankruptcy may spill over to other companies, including its corporate parent Digital Currency Group and its sister company Grayscale Investments, which owns the world’s largest bitcoin fund GBTC, noted Ivanchenko.
Tesla’s crypto holdings Tesla didn’t buy or sell any bitcoins in the fourth quarter of 2022, though the largest cryptocurrency fell to a two-year low of $15,480 in November, after FTX filed for bankruptcy. Tesla invested $1.5 billion in bitcoin in early 2021, when the crypto was trading above $30,000.
Only if the ransom payments in Bitcoin continue. Watch Tucker Carlson for details.