← Go back Dec 12, 2023
NEW YORK: The sense of doom that gripped crypto markets at the end of 2022 following a US$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 US$530bil to its market capitalisation. In its wake, myriad smaller tokens ranging from Sam Bankman-Fried-backed solana to dog-and frog-themed memecoins took off as investors embraced risk again. An investor who bought US$100,000 of solana at the start of 2023 would now be sitting on a more than US$800,000 gain. Underpinning much of the bonanza is optimism that US regulators will soon give their first blessing for an exchange-traded fund (ETF) that invests directly in bitcoin. Investors will find out by Jan 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 US$4.3bil 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. Supporters say a quadrennial event due in 2024 known as the halving – or halvening – will curb supply growth, providing a prop for the token alongside potential ETF demand. The dominant cryptocurrency is still trading well below its November 2021 record of almost US$69,000. Bitcoin miners Marathon Digital Holdings Inc and Riot Platforms Inc, top US crypto exchange Coinbase Global Inc and software-company-turned-bitcoin-investor MicroStrategy all jumped as crypto markets recovered. Coinbase’s almost 400% gain weathered a lawsuit from the Securities and Exchange Commission for allegedly running an unregistered platform, an accusation the company contests. — Bloomberg
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