In a dazzling start to the New Year, Bitcoin surged beyond $45,000 today, marking its highest level since April 2022 and signaling a robust beginning for the world’s largest cryptocurrency. The optimism surrounding the potential approval of exchange-traded spot bitcoin funds has fueled this upward trajectory.
Bitcoin soared to a 21-month peak, hitting $45,532, following its impressive 156% gain last year, marking its most formidable annual performance since 2020. While currently at $45,318, it still lingers below its record high of $69,000 attained in November 2021.
Ether, linked to the Ethereum blockchain, displayed strength at $2,386, marking a 1.45% increase on Tuesday and a notable 91% surge throughout 2023.
The primary focus for investors lies in the potential approval of a spot bitcoin ETF by the US Securities and Exchange Commission (SEC). Such approval would significantly widen Bitcoin’s market accessibility, attracting substantial investments from millions of potential new investors.
While the SEC has rejected several spot bitcoin ETF applications, recent indications suggest a shift in stance. With expectations mounting for a decision in early January, anticipation builds around the potential approval of at least some of the 13 proposed spot bitcoin ETFs.
Chris Weston, Pepperstone’s head of research, highlighted the significant market response expected upon the SEC’s decision, emphasizing the potential for an immediate downturn in the event of rejection or a surge if approval is granted.
Cryptocurrencies have found support in the speculation of major central banks cutting interest rates in the coming year. This positive outlook contrasts with the past market pessimism triggered by the collapse of FTX and other crypto-business failures in 2022.
Jupiter Zheng, partner of liquid funds at HashKey Capital, expressed optimism, citing the expected growth in the crypto market this year. Factors influencing this projection include the influx of investment from spot ETFs, the Bitcoin halving, and a more accommodative global monetary policy.
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