Bitcoin rose 1% on Wednesday to $38,168, its highest level since last spring, but the spectacular comeback of the world’s largest cryptocurrency is taking place under completely strange conditions.

Markets Insider notes that the price of bitcoin rose more than 10% in November on expectations that the Federal Reserve, the central bank in Washington, will start cutting interest rates next year.

High base interest rates are bad news for cryptocurrencies as yields on government bonds and other less risky investments rise and investors opt for smaller but safe returns at the expense of extreme volatility in the crypto sector.

Individual investors typically turn to cryptocurrencies during periods when inflation is high and stock market returns are low. But inflation in the United States has been falling steadily since the second half of last year, even as it remains above the Fed’s 2 percent target and the U.S. stock market is on track for a record year with record returns.

In addition, the interest of institutional players in cryptocurrencies has significantly decreased after a series of large-scale scandals that have shaken the credibility of the cryptocurrency sphere, the most high-profile of which was the collapse of FTX, the second largest cryptocurrency trading platform in the world for a time respectively in November of last year.

In 2023, the Bitcoin rate increased by more than 100%.

However, since the beginning of 2023, the price of Bitcoin has increased by about 130%, and “crypto enthusiasts”, including financial companies, are once again predicting the cryptocurrency to rise to unforeseen heights.

For example, Standard Chartered said on Tuesday, repeating an earlier prediction that the price of bitcoin is on track to reach $100,000 by the end of next year. For comparison, the cryptocurrency’s all-time high price was $68,789.63.

The current evolution of the price of Bitcoin is made even more unclear by the huge scandal that Binance, the world’s largest cryptocurrency trading platform, was embroiled in last week in the United States.

Charged by US federal authorities with a series of serious violations of the law, Binance has agreed to pay a $4.3 billion fine, one of the largest in US corporate history. In addition, Binance’s co-founder, the iconic Changpeng “CZ” Zhao, agreed to step down as CEO of the company and pleaded guilty to several criminal charges against him.

Zhao, or “CZ” as he is known in the crypto world, has cultivated for years both himself and Binance an image of seriousness and sound investment in the crypto world, known for spectacular ups and downs amid volatility and many scams. Now he faces 18 years in prison.

After every major scandal like this, the price of Bitcoin plummeted, taking the rest of the cryptocurrency market with it. But this time, after a small dip following the Binance-related announcement, the cryptocurrency is on the rise again.

Even Binance wrote in a note published on October 6 that the price of bitcoin, then hovering around the $28,000 threshold, was unacceptable under the circumstances.

PHOTO article: Dreamstime.com.