Back from the Dead
We thought it was all over when FTX collapsed. At the beginning of 2023, the two major cryptocurrencies of Ethereum and Bitcoin had lost more than 75% from the highs made not that long ago. The froth got completely wiped out and a lot of the businesses with shaky foundations have seized to exist. The industry has taken steps to clean itself up, which some would say is healthy, and most cryptocurrencies have more than doubled this year.
What’s even more impressive is that this performance came amidst some fairly large gyrations in other markets, a regional banking crisis, the seemingly never-ending fight against inflation, and major geopolitical events. Ironically, the rally has been somewhat unloved. Most had simply lost interest. Others lost too much money the year before, and let’s face it, being an NFT trader just no longer carries the same cache at a Miami cocktail party.
That means, there are plenty of people on the sidelines. Wouldn’t you know it, Blackrock, the biggest baddest asset manager in the world, is launching a physically backed Bitcoin ETF. That will open the door to institutional investors and should help. Reading more about the adoption of blockchain technology, and less about a picture of a monkey that’s allegedly worth a million dollars, will be key to sustain momentum.