Bitcoin Bounce: What’s Next?

Bitcoin Bounce: What’s Next?

The markets this year are crashing, uncertainty abounds and the US government has had to step in to save two large US banks in recent days. So why is bitcoin, considered among the riskiest of them all, rising so quickly?

Just months ago, all forms of cryptocurrency seemed to be going up in flames, with bitcoin plunging from nearly $50,000 at the start of 2022, to less than $17,000 by the time 2023 rolled around.

Bitcoin has since risen more than 60% and climbed another 8% on Friday above $27,000, all at a time of mass layoffs in the tech sector and widespread anxiety about stability in the US banking sector.

So what happened?

The pandemic was an era of massive growth for both tech companies and crypto. This increase started to slow down in late 2021 as people started to travel, go out to restaurants or see a show. They spent much less time in front of screens, and at the same time, the government stimulus checks that allowed people some financial cushion began to end. Crypto began to fall in step with technology. On top of that, in March 2022, the US Federal Reserve began an aggressive series of interest rate hikes, its most powerful weapon to combat inflation, which had begun to rise rapidly.

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