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Cryptocurrency bulls are extending one of the most unlikely rallies of the year so far, pushing Bitcoin above $21,000 for a second day. That means the digital currency has now recouped all its losses since the spectacular collapse of FTX in November.
The rising tide has lifted most crypto boats, the DealBook newsletter reports. Even some beaten-down tokens — including FTT, the in-house token of the bankrupt exchange FTX — have rebounded as investors bet the Federal Reserve will slow its interest rate increases, leading to a broad rally of risky assets. Shares in Coinbase, the publicly traded crypto exchange that has been laying off workers and cutting costs, gained at the market open in New York; it’s up more than 30 percent over the past week.
But crypto analysts are divided on whether the rally is sustainable; by Wednesday afternoon, Bitcoin had fallen back below $21,000. Skeptics argue that the fundamentals for a long-term rise are missing, making the recent jump a risky bet for investors.
The crypto rally comes as lawyers at Sullivan & Cromwell, the law firm advising on FTX’s multibillion-dollar bankruptcy, disclosed that the company’s assets were worth roughly $5.5 billion, including $1.7 billion in cash and $3.5 billion in crypto assets. That makes this wider rally significant for FTX creditors — if it lasts.