On Tuesday, Bitcoin, the foremost cryptocurrency, surged past the $45,000 milestone, reaching its highest level since April 2022. This upswing coincides with increasing enthusiasm regarding potential approvals for exchange-traded spot bitcoin funds.
Bitcoin reached $45,488, marking a 21-month peak and showcasing an impressive 154% surge over the past year, representing its strongest performance since 2020. Despite a 2.6% uptick to $45,344 in the latest trading update, it still lags behind its peak of $69,000 recorded in November 2021.
In parallel, Ether, the cryptocurrency associated with the Ethereum blockchain network, exhibited positive movement, rising by 1% to reach $2,376 on the same day.
Bitcoin’s resurgence is fueled by the anticipated decision from the US Securities and Exchange Commission (SEC) and prevailing market sentiment. Investors are closely watching the potential approval of spot bitcoin exchange-traded funds (ETFs) by the SEC, which could significantly broaden bitcoin market accessibility to a wider investor base. Despite past rejections, optimism is rising around the potential approval of some of the 13 proposed spot bitcoin ETFs expected in early January.
Market sentiment is not solely tied to ETF prospects but also hinges on the expectation of interest rate cuts by major central banks in the coming year. These factors collectively contribute to a positive outlook for cryptocurrencies, offsetting the previous gloom in the crypto markets following setbacks experienced by FTX and other crypto firms in 2022.
Jupiter Zheng, Partner of Liquid Funds at HashKey Capital, shared his optimistic outlook on the cryptocurrency market’s trajectory in 2024 with Reuters. He emphasized the potential for significant growth in the crypto landscape, attributing it to pivotal factors such as the anticipated influx of investment funds from spot ETFs, the Bitcoin halving, and a more accommodative global monetary policy in both the United States and worldwide.