For the first time this year, Bitcoin has risen above $40,000 as traders anticipate the upcoming approval of U.S. stock market-traded bitcoin funds and the widespread excitement surrounding U.S. interest rate cuts.
The value of the largest currency in the world reached a peak of $40,210 on Sunday, the highest since April 2022. Early on Monday morning in Asia day, it was stable at $40,011.
“We’ll see if it sticks throughout the day, but bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum,” said Kyle Rodda, an analyst at Capital.com.
Because it broke out of the so-called “crypto winter” that followed scandals, such as the bankruptcy of exchange FTX last year, bitcoin has more than doubled in value this year.
The markets have been betting that the U.S. Federal Reserve will finish hiking rates and begin reducing early in 2023. As a result, riskier equities and other interest-rate-sensitive assets, including gold, have also surged sharply over the past several weeks.
Bets that an approval is soon to come have also increased after reports in October that the U.S. Securities and Exchange Commission will not appeal a court decision finding the agency had erred in rejecting an exchange-traded fund application from cryptocurrency startup Grayscale Investments.
According to the reasoning, a spot bitcoin ETF would bring in fresh investment into the space by giving formerly hesitant investors access to cryptocurrency through the stock market.
Coins connected to the Ethereum blockchain, ether, too reached a 1-1/2 year high on Sunday, peaking at $2,218 before levelling out on Monday in Asia at $2,197.
The record highs for ether and bitcoin in 2021, which were over $4,000 and $60,000, respectively, are still far below us.
Previously, in US premarket trading, shares of stocks related to cryptocurrencies also increased. The stocks of miner Marathon Digital Holdings increased 4%, and those of digital asset exchange Coinbase Global Inc. surged 3.5%.
The country’s first exchange-traded fund that is directly linked to Bitcoin is expected to be approved soon, according to traders, by the US Securities and Exchange Commission. The chief business officer of Deribit, Luuk Strijers, claims that the deal reached last month between US authorities and cryptocurrency exchange Binance Holdings Ltd. has further eased tensions.
