Bitcoin Pushes Above $19K for First Time Since FTX Collapse

With an advance during the early afternoon Eastern time, bitcoin (BTC) briefly rose above $19,000, up more than 7% for the day and at its highest level since it was gapping down in early November as crypto exchange FTX imploded.

Bitcoin is now up about 14% this year after falling 63% in 2022.

Meanwhile, shares of crypto exchange Coinbase (COIN) were up 4% in recent trading. They have risen 35% year to date. The moves in the stocks of bitcoin miners are even more dramatic: Marathon Digital (MARA) is up 16% Thursday and 83% year to date, and rivals Riot Platforms (RIOT) and Hut 8 Mining (HUT) have notched similar gains.

Grayscale Bitcoin Trust (GBTC) – whose discount to net asset value (NAV) widened to nearly 50% toward the end of 2022 – is up 12% for the session, and has now narrowed its discount to NAV to 36.4%. Shares of MicroStrategy (MSTR) – a software company that has more than 130,000 bitcoins in its reserves – were up 5.5% Thursday and have jumped 42% this year. Grayscale is owned by Digital Currency Group, which is also CoinDesk's parent company.

The Consumer Price Index rose 6.5% in December from a year earlier, inline with expectations and down from a 7.1% increase in November. The slower pace of inflation will likely pave the way for the Federal Reserve to ratchet down its pace of rate hikes to 25 basis points per meeting from 50 in December (and 75 prior to that).

Steven Lubka, managing director of Swan Bitcoin's private client department, said he expects inflation to continue to soften in the first half of 2023, which should give the Fed room to throttle back on its monetary-tightening policy. He cautioned, however, that consumer prices in the second half of the year might not be so benign and that the central bank may have to deal with a softening or even recessionary economy alongside rising inflation.