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Bitcoin Bitcoin hit its highest price in nearly a month on Thursday as traders bet on a cooling of US inflation and digested news that lawyers at defunct crypto exchange FTX have found billions of dollars in assets.
The world’s largest digital currency climbed above $18,000 for the first time since December 14, gaining nearly 4% in value over the past 24 hours. According to data from Coinmetrics, bitcoin was trading at $18,232.36 as of 8:50 a.m. ET on Thursday.
On Wednesday, lawyers for collapsed crypto exchange FTX said they found nearly $5 billion in “liquid” assets, including cash and digital assets. The recovery will be a welcome boon for FTX customers after the crypto exchange imploded in November.
FTX’s lawyers nevertheless warned that the $5 billion in cash was so high that selling the assets could put significant pressure on the market, reducing their value.
However, prices are still up 6.5% year-on-year. This was down from the 7.1% jump in November and well below the 9.1% high in June. Investors hope the decline could put pressure on the US Federal Reserve to reverse interest rate hikes.
The Fed and other central banks have been raising interest rates over the past year in an effort to tame rising inflation, forcing stocks and cryptocurrencies to slide sharply lower in 2022.
The expectation now is that the US central bank will cut rates, taking some of the pressure off risk assets.
Bitcoin is down about 74% from its November 2021 all-time high of $68,990. Last year, nearly $1.4 trillion in value was wiped out of the cryptocurrency market as traders dumped riskier assets like technology and growth stocks.
Bitcoin and the broader digital currency market also declined, suggesting a growing correlation with major stock benchmarks such as the Nasdaq Composite.
The plunge was also caused by crypto-specific issues, including the collapse of projects and companies such as FTX and Terra.
However, Bitcoin has started 2023 on a positive note, with its price rising steadily over the last 12 days.
“Bitcoin has been in a downtrend for over a year now, which is a standard period of a bear market in crypto,” Vijay Iyer, vice president of corporate development and international at crypto exchange Luno, told CNBC in emailed comments Thursday morning.
“We have seen many negative events over the past year, and if one looks at the price reaction to those events, in general it is getting lower and lower – a sign that the market is accepting the news well. The selling pressure is being absorbed, and hence we are going into an accumulation phase,” Iyer said.
“It could also mean that the market feels that the worst is over for crypto and that most of the negative news is now in its price.”
Thursday’s jump in bitcoin prices led to a jump in other digital currencies. The second-largest coin, ether, rose nearly 5% to $1,397.78, while Binance’s BNB token gained 3% to $283.
Binance CEO Changpeng Zhao told CNBC on Wednesday that the exchange plans to increase recruitment Unlike other exchanges that cut jobs by 15% to 30% in 2023.
Binance, which previously a. earmarked $1 billion for Fund aimed at promoting industry After the collapse of FTX, it has besieged itself with fear over the strength of its reserves. the company’s so-called reserve of reserves, auditors working on the tombs, Stopped all work with crypto companies In December.
Binance says it has more than enough assets to cover liabilities.