Cryptocurrency enthusiasts celebrated on Tuesday, as the price of Bitcoin reached a record high of more than $69,000. For believers, it was a moment of vindication after a 2022 industry downturn that sent several major companies into bankruptcy and tainted crypto’s reputation.
But is crypto really back from the dead? While the numbers suggest the industry is starting to thrive again, there are major differences between this bull run and the euphoria that drove crypto prices to previous highs.
Here’s what to know about the new crypto surge.
Why did cryptocurrencies collapse in the past?
The last time Bitcoin hit a record was November 2021, as cryptocurrencies became a cultural phenomenon. Crypto executives hung out with celebrities, and their companies conducted giant marketing campaigns featuring Super Bowl commercials.
Prices crashed in the spring of 2022, as some of the most prominent crypto firms were exposed as frauds. People who had poured their savings into crypto lost everything. The decline culminated in November 2022, when the FTX crypto exchange, founded by Sam Bankman-Fried, collapsed after the equivalent of a bank run, costing customers $8 billion.
Since then, Bitcoin has been on a tear. After hitting a low of roughly $16,000 after FTX’s implosion, the virtual currency’s price has soared to $69,000.
How did Bitcoin rebound?
A major turning point for the crypto industry arrived in August, when a court ruling paved the way for financial firms to offer new investment products tied to the price of Bitcoin. The products, called exchange-traded funds, or E.T.F.s, gave investors a way to dabble in cryptocurrencies without owning them directly.
