Bitcoin recovers to level before terra stablecoin meltdown
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Bitcoin hit $42,000 Monday.
Why it matters: The original cryptocurrency has now recovered to its trading level from before the terra usd stablecoin meltdown in May 2022, the first major shock to the sector since a gradual downturn began six months prior.
The intrigue: We could be looking at the first bitcoin-driven bull market in years.
Be smart: 2021's boom was driven by the mania for non-fungible tokens.
- 2017's boom was driven by the mania to buy into initial coin offerings.
- The last time an all-time high was hit purely by bitcoin enthusiasm was 2013, when BTC broke $1,000 for the first time.
While there will no doubt be all kinds of zaniness in any subsequent crypto boom, the heart of the matter now seems to be anticipation of bitcoin ETFs.
- Regulatory approval on the U.S. — of one or several bitcoin such exchange traded funds — would open the brokerage accounts of the richest country in the world to bitcoin.
- On a more macro level, expectations for Fed rate cuts next year have been driving up commodities. Gold prices have been growing for two months, hitting multiple new highs.
What we're watching: If BTC breaks $46,300, all of the losses of 2022 will be wiped away.
Go deeper: One investor bets bitcoin's bull market has begun (from July)
