Bitcoin touches $30,000 for the first time since June 2022 Bitcoin touches $30,000 for the first time since June 2022 Bitcoin touches $30,000 for the first time since June 2022

Bitcoin touches $30,000 for the first time since June 2022

Summary:  The crypto market has been on a rally this year, as Bitcoin trades at $30,000 for the first time since June 2022, up by over 80% year-to-date. We mainly view the surge in the light of three factors, namely that the market sees the macro environment is about to be better for risky assets, recent banking turmoil, and unsustainably low price levels due to last year’s contagion. We are particularly watching the macro environment from here.


In 2022, the crypto market shattered to pieces, as contagion hit the industry, during the collapses of FTX, Terra, Celsius, and others. This triggered tumbling prices across the market, as Bitcoin slipped by as much as 77% in 2022 compared to its November 2021 all-time high of $69,000. Too, Ethereum traded up to 82% lower in 2022 relative to its November 2021 all-time high.

This year has so far been a whole different story. From changing hands at $16,500 (BTCUSD) and $1,190 (ETHUSD) at the beginning of the year, Bitcoin and Ethereum have surged by over 80% and 60% to $30,100 and $1,910, respectively. In view of this rebound, crypto has been one of the best-performing asset classes year-to-date if not the best, finally attracting the attention of the media on another topic than continuous contagion.

Macro environment, banking crisis, and panic

In our view, there are three predominant reasons for this year’s rally in the crypto market.

In the last few years, crypto advocates have firmly argued that Bitcoin in particular is a hedge against inflation. However, when inflation truly hit the world economy shortly after, causing central banks to respond by increasing interest rates and initiating quantitative tightening to decrease liquidity in 2022, Bitcoin did not satisfy this claim but instead performed badly during the soaring inflation. As inflation and monetary policy were leading factors in the crypto market’s crash last year, we must turn our attention toward these factors as the tide turns. It appears that the market now expects an economic slowdown, forcing central banks to stop interest rate hikes, maybe even slightly lowering them before the year’s end. This has caused an increase in risk appetites just as market participants reassess their portfolios based on a fresh outlook.

In February and March, several American banks ceased operations mainly due to liquidity concerns, strikingly including crypto banks Signature and Silvergate. This triggered a shift in deposits from, for instance, regional banks to large banks, as depositors started to fear additional bank collapses. Due to the decentralized nature of crypto assets, we perceive it likely that the fear of bank collapses has fueled the surge in crypto prices, as crypto somewhat lives outside traditional financial services. Stressed by the claim that Bitcoin is an inflation hedge, one should be critical to every crypto-specific call now or then, including that crypto is somewhat of a “safe haven”, but looking back at the past few months we think crypto’s decentralization has played a positive role in the recent surge of crypto prices.

In hindsight, the market may have panicked too much following the contagion last year, forcing prices down to unsustainably low levels, so the market had to recover more than in normal circumstances. As the market has now likely accounted for the latter and the bank turmoil seems to be over for now, we are largely watching the macro environment going forward. It appears likely that it is the leading factor impacting where to go from here.

Source: Saxo Group
Source: Saxo Group

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992