Bitcoin surged past the $45,000 mark on Tuesday, reaching levels not seen since April 2022. The world’s most prominent cryptocurrency soared on the back of soaring optimism surrounding the potential approval of exchange-traded spot bitcoin funds, Reuters news report said.
With a staggering 156 percent surge in the last year, Bitcoin hit a 21-month high at $45,922, marking its most robust annual performance since 2020. Despite currently standing at $45,509, Bitcoin still trails its record peak of $69,000 achieved in November 2021.
Ethereum, the second-largest cryptocurrency, also witnessed an upward trend, climbing by 1.2 percent to $2,386.50 on Tuesday, following its impressive 91 percent surge throughout 2023.
The surge in crypto stock prices closely mirrored the rise in Bitcoin, with Riot Platforms, Marathon Digital, and CleanSpark soaring between 7 percent and 10 percent, rebounding from the previous trading day’s sharp declines in 2023. Notably, software firm MicroStrategy witnessed a 13.4 percent increase, while ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, surged by 7.8 percent.
Investor attention has been sharply focused on the potential approval of a spot bitcoin ETF by the U.S. securities regulator. This approval would potentially open the floodgates for millions of new investors and attract billions in investments. Despite multiple rejections of spot bitcoin ETF applications in recent years, signs suggest regulators might greenlight at least some of the 13 proposed ETFs, with an expected decision in early January.
Matteo Greco, an analyst at digital asset firm Fineqia International (FNQ.CD), expressed optimism, stating, “We expect a positive approval, and I won’t be surprised if after the approval, we see a retracement of lower price levels before we go up again.” Greco added that a spot bitcoin ETF approval would significantly broaden the investor base and enhance market liquidity.
Moreover, the anticipation of major central banks reducing interest rates in the coming year has contributed to the cryptocurrency surge. This shift has helped dispel the gloom that had settled over crypto markets after the collapse of FTX and other crypto-businesses in 2022.
Markus Thielen, founder of digital asset research firm 10x Research, highlighted the historical trend of Bitcoin’s performance during U.S. election years, citing previous Bitcoin halving cycles in 2012, 2016, and 2020. He suggested that crypto markets could witness further gains in 2024 based on this historical trend.
