Bitcoin’s meteoric rise continued on Monday, breaching the $40,000 mark and hitting its highest point in the past 18 months, spurred by anticipations of a shift in interest rates and pivotal regulatory green lights that could pave the way for wider acceptance of this cryptocurrency.
According to CoinMarketCap, Bitcoin, the globe’s most favored digital currency, surged over 5% within the last 24 hours, reaching a trading value of $41,600.
Investors displayed heightened enthusiasm following Federal Reserve Chair Jerome Powell’s statement on Friday, signaling that the central bank’s policy had entered a phase considered as “well into restrictive territory.” While some inferred this as a sign of a halt in interest rate hikes, Powell underscored the Fed’s readiness to increase rates if necessary.
Antoni Trenchev, co-founder of the crypto lending platform Nexo, commented, “The breakthrough of Bitcoin beyond $40,000 may not create the same buzz as its initial rise in January 2021. However, looking back at where we stood a year ago at $15,500, this represents a significant resurgence for an asset once deemed dormant.”
The current rally mirrors investors’ eagerness to move past recent controversies surrounding the cryptocurrency sphere. Last month saw Binance’s billionaire founder, Changpeng Zhao, pleading guilty to federal money-laundering charges and stepping down from his position as CEO. This occurred shortly after FTX co-founder Sam Bankman-Fried was convicted by a jury for orchestrating a multibillion-dollar fraud.
Bitcoin has recorded a staggering 150% surge in value this year, although it still lags behind its all-time high of $69,000 witnessed in November 2021.
Optimism is fueled partly by expectations surrounding the approval of a bitcoin-focused exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC). The SEC faces a deadline of January 10 to evaluate applications for such funds.
A spot bitcoin ETF would enable conventional investors to gain exposure to the digital asset without direct ownership. While there has been a long-standing desire within the market to leverage the digital asset’s surges, its volatility has discouraged ownership among those outside the digital asset community.
