Bitcoin Hits $19K, First Time Since the FTX Collapse

Bitcoin can be advanced as early as the afternoon Eastern timeBTC) briefly rose above $19,000, up more than 7% for the day and at its highest level since it was gapping down in early November as crypto exchange FTX imploded.

Bitcoin is now up around 14% after falling 63% 2022.

In the meantime, Coinbase’s shares (COIN), a crypto-exchange, was up 4% during recent trading. They have grown 35% in the last year. Even more dramatic are the moves in bitcoin miners’ stocks: Marathon Digital (MARA), up 16% and 83% respectively, while rivals Riot Platforms and Hut 8 Mining have seen similar gains.

Grayscale Bitcoin Trust (GBTC) – whose discount to net asset value (NAV) widened to nearly 50% toward the end of 2022 – is up 12% for the session, and has now narrowed its discount to NAV to 36.4%. Shares of MicroStrategy (MSTR) – a software company that has more than 130,000 bitcoins in its reserves – were up 5.5% Thursday and have jumped 42% this year. Digital Currency Group owns Grayscale, which is also CoinDesk’s parent company.

The Consumer Price Index rose 6.5% in December This was a 1% decrease from November’s 7.1% increase, and is consistent with expectations. This slower rate of inflation will likely allow the Federal Reserve to slow down its pace for rate increases to 25 basis points per meeting, from 50 in December and 75 before that.

Steven Lubka is the managing director for Swan Bitcoin’s private clients department. He expects that inflation will continue to decline in the first quarter of 2023. This should give the Fed more flexibility to reduce its monetary tightening. He warned, however, that consumer price increases in the second quarter of 2023 might not be as benign, and that the Fed may need to adjust its monetary-tightening policy to accommodate a weakening economy or even a recessionary one.