The largest token is up over 40% since the turn of the year, a first-month gain bettered only twice before when crypto was in its infancy. Smaller coins like Solana, Axie Infinity and Decentraland have doubled in value, part of a $280-billion January climb in digital assets overall, CoinGecko figures show.

The rebound from last year’s deep rout is part of a wider revival in risk appetite on expectations that central banks will slow interest-rate hikes and perhaps even cut borrowing costs later this year as high inflation moderates.

The rally in virtual coins has weathered ongoing fallout from the collapse of Sam Bankman-Fried’s FTX exchange – such as the bankruptcy of crypto lender Genesis Global Holdco LLC and a spate of layoffs across the industry.

January “feels like a month of new beginnings, with emerging clarity as to bankruptcy proceedings, corporate restructurings and market fundamentals pointing to the bottom being behind us”, wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter.

Still, there are plenty of sceptics who doubt if the rebound in the likes of crypto and tech stocks will last. One risk is that the soft economic landing markets are hoping for is fanciful because rates must stay higher for longer.

The comeback of speculative assets like Bitcoin and the Ark Innovation ETF “will likely reverse” if oil, wages and consumer-price increases shift the “soft landing” narrative temporarily in coming weeks into a “no landing” view, Bank of America strategists led by Michael Hartnett said last week.

Federal Reserve chair Jerome Powell may also remind investors that officials plan to keep rates elevated for some time. He’s due to speak after an expected downshift by the Fed to a quarter-percentage-point hike this week.

Some corners of global markets are also flashing warnings. For instance, hedge funds have built up the biggest bearish bet on bond futures on record, clashing with the narrative that a peak in rate hikes is near.

For now, momentum is king. Rick Bensignor of Bensignor Investment Strategies targeted $25,000 for Bitcoin in a note on Monday, a level it last hit in August.

Bitcoin edged down about 1% to $23,640 as of 11.30am in Tokyo on Monday. It’s on course for the best month since December 2020. Ether, the second-largest token, was steady at about $1,635. BM/DM