The ongoing cryptocurrency bull market run has included both major plays like Bitcoin (CRYPTO: BTC) and alternative coins. The increased appetite for risk since early January has also boosted other risky investments, such as stocks related to artificial intelligence, leading the way.
So, what has caused this increased appetite for risk?
What Happened: Most cryptocurrencies peaked in November 2021 and endured a prolonged downtrend throughout 2022, marking a dismal year for most financial assets. Inflationary pressures prompted global central banks to raise interest rates, keeping investor sentiment cautious.
Scandals like the FTX fiasco, the collapse of Three Arrows Capital, and Voyager Digital‘s bankruptcy further fueled investor fear and drove them toward safe-haven assets. Regulatory concerns also loomed large.
Crypto’s Comeback: In 2023, cryptocurrency investors emerged from the crypto winter with renewed optimism. After a volatile first nine months, Bitcoin experienced a sharp upward trend in late 2023, ultimately becoming one of the ...