Bitcoin, the leading cryptocurrency, surged nearly 5% to cross the elusive 40,000 threshold, marking its remarkable resurgence in over 18 months. This notable climb continued the digital currency’s year-long recovery, fueled by anticipations of reduced interest rates and heightened demand from the exchange-traded fund (ETF) sector.
As of 11:30 a.m. BST, Bitcoin stood at 41,653, reaching its highest value since the tumultuous events of April 2022, which witnessed significant upheaval in crypto markets following the TerraUSD stablecoin collapse, leading to a staggering trillion devaluation of digital assets.
The cryptocurrency has witnessed an astounding 150% growth since the beginning of 2023, an upsurge that has caught the attention of investors. This surge aligns with a growing conviction among investors that the Federal Reserve might halt its interest rate hikes as U.S. inflation shows signs of cooling down, with expectations mounting for a potential rate cut in the upcoming year.
Furthermore, the crypto industry eagerly anticipates the verdict on filings made by notable firms like BlackRock Inc. seeking approval for the first spot bitcoin ETFs in the U.S. Bloomberg forecasts multiple such products gaining approval from the Securities and Exchange Commission (SEC) by January. There’s also rising confidence that the SEC will greenlight the transition of Grayscale Bitcoin Trust into an ETF. Optimistic investors interpret these moves as signals of a maturing crypto industry, poised to curb dubious practices and welcoming a wider investor base through forthcoming ETFs. Bitcoin’s surge in 2023 has outpaced the gains observed in global stocks and gold, signaling a compelling shift in market dynamics.