This past weekend saw a two-month high for Bitcoin, with the cryptocurrency up 27% since the beginning of 2021. The resurgence of the crypto market has pushed the combined market value of all cryptocurrencies past the $1 trillion threshold for the first time since early November.
The rise in crypto values is being attributed to the rebound from the crash that followed the collapse of FTX and Alameda Research, as well as the broader boom in equities as more data suggests inflation is cooling. This has led investors to hope that the Federal Reserve will take its foot off the interest rate hike pedal.
However, not everyone is so optimistic. JPMorgan Chase analysts have warned that the recent spike in equity prices could hit an air pocket and end up looking premature, given that the Federal Reserve has yet to finish hiking its interest rates. Additionally, Bitcoin is still down by 51% from the same time last year.
The market will have to wait and see if this resurgence in crypto is a true "resurgence or just a brief rebound". Investors should be aware of the looming macroeconomic concerns that could affect crypto's gains.