Bitcoin continues its spectacular comeback under completely bizarre conditions

The price of bitcoin rose 1% on Wednesday to $38,168, the highest level since last spring, but the spectacular comeback of the world’s largest cryptocurrency is taking place under completely bizarre conditions.

Markets Insider notes that the price of bitcoin rose more than 10% in November on expectations that the Federal Reserve, the central bank in Washington, will begin cutting interest rates next year.

High benchmark interest rates are bad news for cryptocurrencies as yields on government bonds and other less risky investments rise, with investors opting for smaller but safe gains at the expense of extreme volatility in the crypto sector.

Individual investors typically turn to cryptocurrencies during periods when inflation is high and stock market gains are low. But in the United States inflation it is continuously decreasing since the second half of last year, even if it remains above the Fed’s 2% target, and the US stock market is on track for a year of record returns.

In addition, the interest of institutional players in cryptocurrencies has decreased significantly after a series of scandals of major proportions that shook confidence in the crypto field, the most resounding of which was the collapse of FTX, the second largest cryptocurrency trading platform in the world at the time respectively, in November last year.

Bitcoin price increased by more than 100% in 2023

However, the price of bitcoin has increased by about 130% since the beginning of 2023, with “crypto-enthusiasts” and including financial companies now again predicting the rise of the cryptocurrency to unsuspected heights.

For example, Standard Chartered said on Tuesday, reiterating an earlier forecast to that effect, that the price of a bitcoin is on track to reach $100,000 by the end of next year. For comparison, the highest price recorded by the cryptocurrency in its history was $68,789.63.

The current evolution of the bitcoin price is all the more incomprehensible because of the huge scandal in which Binance, the world’s largest crypto trading platform, was involved last week in the United States.

Charged by US federal authorities with a series of serious violations of the law, Binance has agreed to pay a $4.3 billion fine, one of the largest in US corporate history. Furthermore, Binance co-founder, the iconic Changpeng “CZ” Zhao, agreed to step down as the company’s CEO and admitted to several criminal charges against him.

Zhao, or “CZ” as he is known in the crypto world, has for years cultivated, both for himself and Binance, an image of seriousness and investment trust in a crypto world known for spectacular rises and falls amid volatility and many scams He now faces an 18-year prison sentence.

After every major scandal like this the price of bitcoin crashed, taking the rest of the crypto market down with it. But this time, after a slight dip following the Binance-related announcement, the cryptocurrency is back on the rise.

Even Binance wrote in a note published on October 6, that the price of bitcoin, which was then hovering around the $28,000 mark, is unsustainable under the given conditions.

PHOTO article: Dreamstime.com.