The cryptocurrency market has proven to be rewarding to early adopters and investors with good timing. However, it has also shown to be extremely volatile and has attracted negative attention due to the alleged actions of characters like Sam Bankman-Fried. However, Bitcoin and its peers have managed to build momentum out from the shadow of the SBF trial.
Bitcoin managed to rise above US$35,000 on Monday, October 23, 2023. That meant that the world’s top digital currency was able to rise to a 16-month high. Bitcoin and its peers soared to new heights in late 2021, riding a wave of investor euphoria and significant liquidity that flooded the markets to combat the ill-effects of the COVID-19 pandemic.
Positive investor sentiment for Bitcoin and the broader cryptocurrency market was extinguished by a surge in inflation that had not been seen in decades. Worse, central banks in the developed world slammed on the monetary brakes and pursued the most aggressive interest rate tightening policies since the beginning of the Millennium. These factors combined to force the crypto market back to earth.
The negative sentiment swirling around Bitcoin and the crypto space has subsided considerably since the crash of late 2021 and early 2022. While the SBF trial has attracted headlines, major financial institutions have also started to release more Bitcoin focused exchange-traded funds (ETFs), thrusting a greater proportion of retail investors into the crypto market.
It should be clear that Bitcoin and some of its top peers like Ethereum are here to stay, as is the broader cryptocurrency market. However, whether investors can stomach the volatility in this alternative asset is something that you have to determine yourself.
