News • 3 min read
The crypto market has seen a significant rally over the past couple weeks, with Bitcoin, Ethereum, and many altcoins seeing double digit percentage gains. This is in contrast to the stock market, including big US players like NASDAQ and S&P 500, which have faced downward pressure in the past fortnight. So what's driving this renewed optimism in crypto, and what could it mean moving forward? Let's explore some of the key factors behind the latest crypto surge.
There are a few likely contributors to the recent crypto boost:
The rally has been broad-based, with Bitcoin surging around 50% from recent lows (surpassing $35,000 at one point) and Ethereum gaining over 60%. Many major altcoins have posted gains of 50% or more. Crypto market capitalisation has climbed back over $1 trillion.
The surge shows there is still tremendous and growing interest in crypto among investors. It also suggests the bear market that began in late 2021 may be bottoming out or coming to an end.
As the two largest cryptocurrencies, Bitcoin and Ethereum tend to drive market momentum and attract the most attention. Bitcoin reclaiming the psychologically key $20,000 level (and surpassing $35,000 at one point) has restored some bullish conviction. Meanwhile, Ethereum's gains have been boosted by its major ‘Merge’ network upgrade. The two are serving as flagships for the broader crypto sector. Their rallies also typically lift prices for smaller altcoins, as investors become more willing to take risks.
Many altcoins have seen massive spikes, with some "memecoins" like Dogecoin, BONK and Shiba Inu doubling or more. Plus crypto tied to emerging sectors like metaverses and Web3 have also surged.
The altcoin rally reflects a rebirth of the "risk on" attitude and profit-seeking that characterised the 2021 bull market. Investor selection is key, as coins with deeper value and real-world utility are likely to outlast hype-driven coins and tokens.
The recent crypto revival still requires caution and discipline. But for believers in the long-term promise of blockchain and digital assets, the trends are beginning to point upward again for Bitcoin, Ethereum, and many more.
There are also some huge milestones on the horizon for the industry which are sure to generate wider interest. Most notably is the planned Bitcoin halving event, which is expected to occur early to mid-2024. This is one of the most pivotal events on Bitcoin's blockchain which sees the reward for mining cut in half, reducing the rate at which new coins are created which in turn lowers the available amount of new supply. The previous two halving events in 2016 and 2020 respectively saw healthy increases in Bitcoin’s price. And while halving isn’t the only factor impacting price, it's an important event for existing and potential investors. Stay tuned.
As always, it’s wise to only invest an amount you can afford to lose, and evaluate the fundamentals. But the crypto market is showing more signs of life after a brutal bear market cycle.
The information shared in this article does not constitute investment advice. Investing carries risks. Make sure to conduct your own research before concluding a transaction.
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