Bitcoin crosses $30,000 for first time in 2023

Bitcoin (BTC-USD) crossed $30,000 Tuesday, reaching the highest level for the world's largest cryptocurrency in 10 months.

It briefly touched $30,301 around 2:20 AM ET Tuesday before easing later in the morning. By 8:00 AM ET, bitcoin was changing hands at $30,027, up 6.2% for the last 24 hours. The last time the digital currency was this high was June 6, 2022.

The bitcoin rally buoyed other crypto assets and companies Tuesday, including the stock of cryptocurrency exchange Coinbase Global (COIN) and the price of the world's second-largest cryptocurrency, Ether (ETH-USD), as well as the stocks of bitcoin mining companies Marathon Digital (MARA) and Riot (RIOT).

Bitcoin still has a ways to go to reach the heights it scaled during its peak. It still trades 23% below where it stood one year ago.

The rapid climb of digital currencies is one of this year's big surprises in markets after a crash in 2022 that cost investors billions as higher interest rates and inflation lowered the value and appeal of risky assets. Several crypto players filed for bankruptcy, including FTX in November. FTX's former CEO Sam Bankman-Fried now faces criminal charges that he stole billions of FTX customer funds and misled investors.

"It's a bounce back from the really poor performance we saw in 2022," VettaFi research head Todd Rosenbluth told Yahoo Finance.

What gave the market added momentum this year was a banking crisis in March that took down three lenders, including two that specifically served cryptocurrency customers.

Since March 10, the day regulators seized Silicon Valley Bank in the second-largest bank failure of U.S. history, bitcoin has climbed $9,500 higher for a more than 30% rise. Ether (ETH-USD) is up more than 29%. According to Coinmarketcap, the total value for all crypto assets is up more than 24% during that period, as of Tuesday at 8:00 a.m. ET.

Some investors chose to seek out bitcoin as a safe haven from the perceived instability of banking. Others anticipated the Fed might have to cut interest rates in response to the crisis, sparking more flows into alternative risk assets.

However, the banking crisis also has significantly restrained liquidity in the crypto market according to data collected from Kaiko Research. Because investors now have less banking partners to assist in moving funds from dollars to cryptocurrencies and vice versa, analysts have argued it is much easier to manipulate bitcoin’s price with a large order.

Crypto’s 2023 comeback unfolds even as Washington regulators step up their efforts to rein in the market.

The Securities and Exchange Commission has issued 11 enforcement actions since the beginning of January against crypto firms and individuals, while serving formal letters to Paxos, DeFi exchange Sushi, and Coinbase Global warning the agency plans to bring an enforcement action. Coinbase is the largest U.S. crypto exchange.

Coinbase shares have rebounded 86% year to date but are still suppressed by two thirds below their value a year ago. Marathon Digital and Riot have both more than doubled since the beginning of 2023 but still trade 60% and 45% below their price a year ago.

Another regulator, the Commodities and Futures Trading Commission, also has sued crypto exchange Binance and its CEO Changpeng Zhao for allegedly selling derivatives backed by digital assets to U.S. customers despite not being registered to do so.

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