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Bitcoin price tops $17,000, reaches highest level since FTX bankruptcy

Bitcoin (BTC-USD) traded north of $17,000 on Wednesday afternoon to its highest level in nearly three weeks amid a broad market rally.

Stocks jumped across the board on Wednesday, with the Nasdaq rising more than 4% and the S&P 500 gaining over 3% following comments from Federal Reserve chair Jerome Powell suggesting a slowdown in interest rate increases would be warranted next month.

Currently changing hands at $17,055, bitcoin is up more than 3% on the day. Year to date, bitcoin is still down more than 64%. Bitcoin briefly topped $17,000 early Wednesday morning, but hasn't sustainably been above this level since FTX filed for Chapter 11 bankruptcy protection on November 11.

Ether (ETH-USD) was also higher on Wednesday, rising nearly 6% to approach $1,300. Ether has dropped more than 65% this year.

The total market capitalization of all crypto assets as tracked by Coinmarketcap has risen 3% in the last 24 hours, to $860 billion from $833 billion. The crypto market reached a peak of $2.25 trillion back in January.

Of the major altcoins, no cryptocurrency has been harder from FTX than Solana (SOL-USD), as FTX and affiliated companies made significant investments into Solana-focused firms and projects.

Solana's native token, SOL, was up about 2% on Wednesday but has sold off more than 58% this month. Year to date, it has plunged more than 90%, from $179 to around $13.75 as of Wednesday afternoon.

While major cryptocurrencies may now be suggesting a rebound, November proved to be one of the darkest months in the short history of crypto businesses.

In May, the dissolution of algorithmic stablecoin TerraUSD sparked contagion across the crypto sector. Hedge fund Three Arrows, one of the industry's biggest borrowers, defaulted on loans in June as a consequence.

Three Arrows' demise promoted insolvency fears industry-wide, hastening withdrawals and panic among lenders such as Voyager Digital, Celsius Network, and BlockFi. Along with crypto exchange FTX, all of the aforementioned companies have since filed for bankruptcy, leaving more than a million customers in the lurch.

Meanwhile, many major companies have made job cuts including Coinbase in June and more recently, Crypto.com, Galaxy Digital, and Kraken. Kraken's co-founder Jesse Powell said today it would lay off 1,100 of its workers as a correction to its rapid growth from the prior year.

Kraken cryptocurrency exchange logo is seen in this illustration taken July 28, 2022. REUTERS/Dado Ruvic/Illustration
Kraken cryptocurrency exchange logo is seen in this illustration taken July 28, 2022. REUTERS/Dado Ruvic/Illustration

"While details from the FTX collapse are still trickling out, it seems like the worst from that corner is already on the table," Noelle Acheson, author of the Crypto is Macro Now newsletter, told Yahoo Finance recently.

"Worrying unknowns are who else could be impacted other than the key market participants that have already disclosed difficulties. Yet given the scope of negative rumors in the market, a better question would be who at this stage would be a big surprise."

Crypto prime broker Genesis paused withdrawals two weeks ago and has been seeking between $500 million and $1 billion in funding. More recently, it has warned clients of the possibility of bankruptcy if funding doesn't come through.

"There will still be a lot more pain that comes from the FTX collapse, but for now that seems to be mostly priced in," Edward Moya, senior market analyst for Oanda said in a note on Wednesday.

Fed will raise its benchmark interest rate and how long it will hold that rates to elevated levels.

David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers

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