What's going on?

Bitcoin’s price powered past $42,000 for the first time since last April. 

What does this mean?

Time heals all wounds in crypto: Binance and FTX’s fallouts may have damaged the industry’s reputation at the time, but the end of the criminal cases has attracted investors back to the digital realm. At the same time, rumors that the Federal Reserve might lower interest rates have got folk back into riskier assets, while safety-seekers have been using crypto to hedge against the risk of currencies losing value. But something extra special is afoot: bitcoin’s famous “halving” will happen next year, which halves the reward for mining and slows the rate at which new coins are created, attracting investors who anticipate higher prices around the event. Add that all together, and bitcoin has rallied by over 150% this year alone.

Why should I care?

For markets: Crypto’s biggest fan.
Bitcoin’s no stranger to falling as fast as it climbed. But this rally is underpinned by more than a Reddit thread: traditional investors are warming to crypto now that the industry’s cast out infamously problematic leaders and seems to be moving toward innovation-friendly regulation. That includes institutions, too. MicroStrategy – known as the biggest publicly traded corporate investor in bitcoin – recently topped up its stash by $593 million to own a commendable $6.5 billion in bitcoin alone.

The bigger picture: This isn’t family dinner conversation.
Bitcoin and ether are still both below their record highs from during the pandemic: $69,000 and $4,868 respectively. There’s no ignoring crypto’s volatility, after all. Any unexpected interest rate adjustments, say, could squash the currencies’ momentum. Legendary investor Charlie Munger certainly wasn’t sold, calling bitcoin “noxious poison” and warning that digital assets were “partly fraud and partly delusion”. All that said, if there’s a Venn diagram for potential payoffs, hedging against traditional currencies, and protecting against geopolitical risks, crypto’s arguably bang in the middle.