Bitcoin has surpassed the $40,000 mark, marking its highest value since April 2022. The surge is attributed to widespread enthusiasm surrounding potential U.S. interest rate cuts and the anticipation of the imminent approval of U.S.-stock market traded bitcoin funds.
During Sunday’s trading, Bitcoin reached an impressive $40,210, and as of the early hours of Monday in Asia, it has remained steady at $40,011 in thin trade.
Analysts are closely monitoring whether this surge will persist throughout the day, with many speculating that breaking significant psychological levels tends to excite bitcoin enthusiasts, adding to the current momentum. Capital.com expressed this sentiment, stating, “Bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum.”
This year has seen Bitcoin more than double in value, shaking off the effects of the so-called “crypto winter” that followed various scandals, including the collapse of the FTX exchange last year.
The recent rally in riskier investments and other interest-rate sensitive assets, such as gold, is part of a broader market trend. Investors are optimistic that the U.S. Federal Reserve has concluded its rate-hiking cycle and will commence rate cuts in early 2023.
In October, reports emerged that the U.S. Securities and Exchange Commission (SEC) would not appeal a court ruling that found the agency was wrong to reject an exchange-traded fund (ETF) application from crypto firm Grayscale Investments. This development has fueled speculation that the approval of a spot bitcoin ETF is on the horizon. The argument is that a Bitcoin ETF would provide hesitant investors with access to the crypto market via the stock exchange, potentially ushering in a new wave of capital.
While Bitcoin has shown significant growth, it is essential to note that both Bitcoin and Ether, the coin linked to the Ethereum blockchain network, are still below their 2021 record highs. Bitcoin soared above $60,000, and Ether surpassed $4,000 during that period. Nevertheless, Ether also made a 1-1/2 year high on Sunday, reaching $2,218 and steadying at $2,197 in Asia on Monday, indicating a broader positive trend in the cryptocurrency market. Investors are now keenly observing whether these bullish sentiments will continue to shape the crypto landscape in the coming weeks.
