Bitcoin just won't die
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- Bitcoin's price has doubled since FTX collapsed a year ago.
- It's outperforming both the S&P 500 and the "Magnificent 7" Big Tech stocks in 2023.
- Hopes that US regulators will soon approve a spot bitcoin ETF have powered the cryptocurrency to stellar gains.
FTX filed for bankruptcy on November 11, 2022.
Just under a year later, bitcoin isn't dead – it's thriving.
The cryptocurrency, which remains the largest digital asset by total market cap, has more than doubled in price since Sam Bankman-Fried's crypto empire crumbled, jumping 105% to just under $37,000 over the past 12 months.
On Thursday, it jumped to an 18-month high after racking up a 4% surge in the space of just 24 hours.
Put bitcoin's gains in perspective, and its stellar rally this year feels even more impressive.
The token's 120% surge in 2023 means it's not only beating benchmark indices like the S&P 500 and the Nasdaq Composite – it's also outperformed the much-vaunted "Magnificent Seven". That increasingly-dominant group of Big Tech stocks is up 95% year-to-date, by Insider's calculations.
Those gains have come after a nightmarish 2022 for the entire digital-asset space. As well as the failure of FTX, crypto prices were rocked by the collapse of other big firms including stablecoin issuer Terra, lender Celsius Network, and the hedge fund Three Arrows Capital.
ETF expectations
Steadily growing speculation about the Securities and Exchange Commission potentially approving a spot bitcoin exchange-traded fund has powered bitcoin's comeback.
On Wednesday, Bloomberg Intelligence analysts estimated there was a 90% chance that such a vehicle – which would allow big US-based institutional investors to buy crypto – would be approved before January 10.
While dozens of big-name firms have filed spot ETF applications with the SEC, perhaps the highest-profile has been BlackRock, the world's largest asset manager with more than $9 trillion under management.
Bitcoin has jumped over 40% since BlackRock applied to have its ETF approved on June 15. CEO Larry Fink has said he believes a successful spot fund would help "democratize crypto" and make it cheaper to trade the token.
Another factor driving bitcoin's comeback is low supply available on the market, with long-term investors holding onto their stashes as they wait for prices to climb higher. The amount of bitcoin in circulation is currently extremely low, according to data from Glassnode.
Bullish predictions
Traders are also gearing up for a so-called "halving" event that's expected to happen mid-2024. Industry veterans believe that event – when the number of bitcoins awarded to miners is cut in half – could push prices beyond $100,000.
And it's not just crypto bulls getting excited about bitcoin's rally.
Some big banks have started to issue headline-grabbing price predictions once again in recent months, after shrugging off the token's rally for much of this year.
In July, UK-based lender Standard Chartered predicted that bitcoin would surge to $120,000 next year with miners likely to cling onto their holdings, while last week Bernstein shared a $150,000 price target.
"You may not like bitcoin as much as we do, but a dispassionate view of bitcoin as a commodity suggests a turn of the cycle," Bernstein managing director Gautam Chhugani said in a report. "A good idea is only as good as its timing."
The FTX fiasco took its latest sorry turn earlier this month when Bankman-Fried was found guilty of seven counts of fraud – which could land the exchange's founder up to 110 years in prison.
But rather than falling from grace alongside the disgraced former billionaire, bitcoin's price has steadily risen – in a sign that even one of the biggest financial frauds in US history hasn't killed crypto.