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After a brutal 2022, bitcoin is gaining steam again. Prices for the digital currency are on a major winning streak, rising nearly 30% since the beginning of January — soaring to about $21,439 per coin on Wednesday.
And the rest of the cryptocurrency industry is following suit:
- The price of ether has risen more than 33% so far this year to nearly $1,600 per coin.
- The value of the entire cryptocurrency market has now surpassed $1 trillion, according to data from CoinMarketCap, a level it hasn't reached since November.
- Shares of Coinbase, a popular crypto exchange, have gained about 35% in the last 5 days.
What experts say
Ed Moya, senior market analyst at the foreign exchange firm OANDA, attributed some of bitcoin’s dramatic rally to the fact that central banks appear likely to stop tightening monetary policy soon, as well as the fact that more investors are buying in.
“Contagion fears have eased and the focus for many crypto traders is to ride this breakout,” he wrote in a blog post on Tuesday.
Keep in mind
This massive rally should remind investors just how volatile cryptocurrency prices can be — and that no one really knows where the market is heading.
- After peaking in November 2021 at more than $64,000 per coin, the price of bitcoin dropped 45% in just three months to $35,000 per coin at the beginning of 2022.
- Bitcoin continued to fall over the course of the year as bankruptcies within the industry, including the dramatic collapse of the FTX exchange, eroded investor confidence.
- Bitcoin ended 2022 at $16,600 per coin — 65% less than at the start of the year.
Those price swings are a major reason experts say you shouldn’t invest any money in crypto that you aren’t prepared to lose.