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BLOOMBERG
The sense of doom that gripped crypto markets at the end of 2022 following a $1.5 trillion wipeout has 12 months later given way to a very different sentiment: avarice.
Bitcoin stormed back with a more than 160% advance this year that added some $530 billion to its market capitalisation. In its wake, myriad smaller tokens ranging from Sam Bankman-Fried-backed Solana to themed memecoins took off as investors embraced risk again. An investor who bought $100,000 of Solana at the start of 2023 would now be sitting on a more than $800,000 gain.
Underpinning much of the bonanza is optimism that US regulators will soon give their first blessing for an exchange-traded fund that invests directly in Bitcoin. Investors will find out by January 10 if that bet, which crypto bulls consider a near-certain winner, pans out. “The approval of the spot ETFs is going to be a major catalyst, it’s going to definitely drive a demand shock” as mainstream investors currently lack a “high bandwidth, compliant” investment channel for the token, Michael Saylor, co-founder of Bitcoin holder MicroStrategy Inc, said on Bloomberg Television. Digital-asset markets still have plenty of detractors who argue cryptocurrencies are fundamentally worthless and a haven for criminals. Binance, the largest exchange, in November agreed to pay a $4.3 billion fine for a range of violations and Chief Executive Officer Changpeng Zhao was forced to step down. Bankman-Fried has been jailed for fraud at FTX, and liquidity has yet to fully recover from the collapse of his empire. Bitcoin’s rally this year topped stocks and gold.