Bitcoin Prices Hit 19-Month High, Cross $40,000 Level
Bitcoin, the world’s largest cryptocurrency, crossed the $40,000 mark for the first time in 2023 in Asia on Monday. This surge was bolstered by anticipation of a bitcoin exchange-traded fund (ETF) approval and bets on U.S. interest rate cuts.
Surge to 19-Month High
Bitcoin soared more than 4% on Monday in Asia to reach a 19-month high, trading as high as $41,520 based on Coin Metrics data. This marked a significant increase, as it was the first time since May 2022 that bitcoin was able to breach the $40,000 level. Notably, it has surged more than 145% from the start of the year.
Causes of the Surge
This recent surge comes after a series of scandals rocked the crypto market, including the collapse of the FTX crypto exchange. Last month, the founder of FTX, Bankman-Fried, was found guilty of all seven criminal charges brought against him related to the collapse of his crypto empire.
Antoni Trenchev, co-founder of digital asset company Nexo, remarked, “Now that $40,000 has been revisited for the first time in almost 19 months, $48,000 and $52,000 look to be the next significant lines in the sand.”
ETF Approval Anticipation
Confidence in the market was boosted by the news that a bitcoin ETF may eventually be approved. Representatives from Grayscale, BlackRock, and the Nasdaq met with officials from the U.S. Securities and Exchange Commission (SEC). In a memo, the SEC said it met with Grayscale about the potential conversion of the Grayscale Bitcoin Trust into an ETF. This move was previously blocked by the SEC, but Grayscale challenged the decision in court and won.
Federal Reserve’s Stance
Federal Reserve Chairman Jerome Powell made statements on Dec. 1, indicating that it is too early to talk about cutting interest rates. He mentioned that the central bank will be “keeping policy restrictive” until policymakers are certain that inflation is returning solidly to 2%. Powell’s comments led to expectations that the Fed is likely done raising interest rates for now, but he also stated that it is “premature to conclude with confidence that we have achieved a sufficiently restrictive stance” and that more hikes could follow.
The surge in bitcoin prices to a 19-month high and the anticipation of a potential ETF approval are driving factors in the cryptocurrency market. With the Fed’s stance on interest rates and ongoing discussions regarding an ETF approval, the future trajectory of bitcoin’s value remains uncertain and will likely depend on these factors.