Just under one year ago, the Bitcoin market faced turmoil as investors panicked and sold their holdings following the collapse of the cryptocurrency exchange FTX. The BTC price hit its lowest level since late 2020, dropping to under $15,500. This marked a significant 77% pullback from the all-time highs it had reached in November 2021 at $69,000. While the collapse of FTX played a role in Bitcoin’s decline in 2022, the aggressive interest rate hiking cycle from the US Federal Reserve caught the market by surprise and acted as the main catalyst behind the bear market.
However, late in 2022, Bitcoin experienced a stunning reversal of fortunes. Currently trading just under $35,000, its price has risen more than 120% from the 2022 lows, and the cryptocurrency’s pullback from its 2021 highs now stands at around 50%. This resurgence is remarkable considering that the macroeconomic landscape has not improved significantly this year. Despite the Fed continuing to lift interest rates in 2023 at a slower and more cautious pace, and long-term US government bond yields reaching multi-decade highs, Bitcoin has managed to recover strongly.
