Here’s Why Bitcoin Jumps 160% YTD Despite Multiple Setbacks

In a remarkable turn of events, Bitcoin has defied the shadows of its 2022 downfall, experiencing a staggering 160% surge in value this year, contributing over $530 billion to its market cap. Meanwhile, this unexpected rally has not only rejuvenated the leading cryptocurrency but has also sparked renewed interest in the broader crypto market.

Notably, the year has been bullish so far for not only Bitcoin but the overall crypto market, as more institutional investors showed interest in the market. So, let’s take a look at the key events this year that have propelled the rally in Bitcoin price, as well as in the broader market.

Bitcoin Shows Resilience Despite Challenges

Amidst lingering skepticism and regulatory challenges, the cryptocurrency market has witnessed an unprecedented revival, driven by the optimism surrounding the potential approval of a Bitcoin Spot ETF by U.S. regulators. According to a recent Bloomberg report, Michael Saylor, co-founder of MicroStrategy Inc., anticipates this approval as a “major catalyst,” creating a new avenue for mainstream investors.

In his statement, Saylor highlighted the significance of approving spot ETFs for Bitcoin, emphasizing that it could act as a substantial catalyst, creating a notable surge in demand. Meanwhile, Saylor’s optimism is rooted in the belief that the current limitations on mainstream adoption stem from the absence of a robust and compliant investment channel for Bitcoin, particularly one with high bandwidth capabilities.

So, the anticipation is that the approval of spot ETFs would address this gap and potentially drive a surge in demand for the cryptocurrency. In addition, speculations over the Bitcoin halving event in 2024 have also raised investors’ sentiment.

Besides, the Fed’s dovish stance and the cooling inflation this year have also sparked optimistic sentiment in the market. The recent U.S. Commerce Department report revealed a 0.1% monthly increase and a 3.2% year-on-year rise in the core PCE price index, which excludes the volatile food and energy prices. Meanwhile, on a six-month basis, the PCE inflation fell 1.9% increase, suggesting the Federal Reserve is nearing its inflation target if current trends persist.

On the other hand, the prior Consumer Price Index (CPI) and Producer Price Index (PPI) reports have also suggested that inflation is cooling in the U.S., boosting bets on the Fed’s policy rate cuts in 2024.

Also Read: Turkey President Recep Erdogan Names Crypto Expert To Central Bank MPC

BTC Price Soars 160% YTD But Challenges Remains

The Bitcoin price noted slight declines of 0.24% over the last 24 hours during writing, and traded at $43,606.06, while its trading volume fell 28.92% to $17.38 billion. However, the crypto has added over 16% on a monthly basis, along with a year-to-date surge of around 160%. Talking about Bitcoin’s market capitalization, it has added over $500 billion through the year.

Despite the ongoing success, the crypto market is not without its challenges. Instances like the $4.3 billion fine imposed on Binance and the legal troubles faced by industry figures like Sam Bankman-Fried have left enduring scars. The market depth, a measure of the market’s ability to handle large orders without significant price impact, has also witnessed a decline, presenting a hurdle for seamless trading.

However, Bitcoin derivatives have seen a surge in activity in 2023, with both options and futures markets experiencing record levels of open interest. This heightened interest is also reflected in the decentralized finance sector, with liquid staking protocols reaching new highs, offering easier access to blockchain rewards.

Also Read: XRP Whale Moves 40 Mln XRP As Analysts Highlight Market Optimism

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