Bitcoin's New Rally: A Return of FOMO and YOLO

• Recollection of the Crypto Market's Tumultuous Journey
• Is Cryptocurrency Going Mainstream Once Again?
• Wall Street's Foray into Cryptocurrency
• Additional Thoughts
• The Unsettling Debut following FTX's Collapse
• Cryptocurrency's Strongest Correlation

Recollection of the Crypto Market's Tumultuous Journey

The cryptocurrency market went through a rough patch roughly two years ago as Bitcoin$42,260 -0.64% (BTC) experienced a massive surge, almost touching $70,000, only to plummet to about $15,000 following the FTX$3.28 -5.38%'s failure. The market gradually rebounded in most parts of 2023, but the financial gains felt hard-earned, with successful rallies often being immediately followed by drawbacks.

By mid-October, BTC's value hovered around $27,000. But the market soon lit up, driven by enthusiasm around bitcoin ETFs and declining interest rates. Bitcoin recently breached the $45,000 mark on Coinbase, only a few days after crossing the $40,000 mark last observed in early 2022.

Is Cryptocurrency Going Mainstream Once Again?

Given the uptick in Bitcoin's value, a renewed interest in cryptocurrency seems apparent. Yet, the persisting question is whether this upward trend will last and if cryptocurrency is heading back to the mainstream. It's been approximately two years since the crypto market displayed this level of buoyancy, which was before the collapse of Celsius, Voyager, Three Arrows Capital, FTX, and Genesis.

The sentiment of FOMO (fear of missing out), often coupled with a hint of YOLO (you only live once), appears to be reviving.

Wall Street's Foray into Cryptocurrency

The burgeoning enthusiasm in the crypto market can largely be attributed to Wall Street heavyweights such as BlackRock, Fidelity, and Franklin$0.0015 -3.24% Templeton making attempts to register bitcoin ETFs in the United States. Should regulators approve these products, anyone with a basic brokerage account will be able to buy them. This process would undeniably be more straightforward and realistic for the average American than setting up a Coinbase account or figuring out how a decentralized exchange or MetaMask operates.

Hence, the formidable sales and marketing leverage of BlackRock, Fidelity, and Franklin Templeton could potentially be behind Bitcoin ETFs soon. This move could significantly boost investment in cryptocurrency. Whether this will trigger a lasting rally remains the subject of debate.

Additional Thoughts

The Unsettling Debut following FTX's Collapse

After FTX's collapse, there were widespread speculations regarding the fate of its bigger competitor, Binance. With U.S. regulators and law enforcement appearing increasingly vigilant, the crypto exchange agreed to pay $4.3 billion to settle various U.S. investigations. Changpeng CZ Zhao stepped down as CEO following these unsettling events. However, the industry took this transition well overall. The first major public interview of Zhao's successor, Richard Teng, was less than ideal as he came across as evasive, particularly regarding the company's base location and other matters.

Cryptocurrency's Strongest Correlation

A common observation in the market is the impact of Elon Musk's statements on the price of Dogecoin$0.091 -0.42% (DOGE), a meme coin he has long favored. A recent case in point is a regulatory filing showing Musk's attempts to raise $1 billion for his AI initiatives, which immediately stimulated a surge in DOGE's value. Hence, one of the most peculiar market correlations continues to hold true.

Edited by Jonathan Stoker