In a remarkable start to the New Year, Bitcoin breached the $45,000 mark on Tuesday, marking its highest value since April 2022. The surge comes on the heels of robust optimism surrounding the potential approval of exchange-traded spot bitcoin funds, setting the stage for a dynamic year for the world’s largest cryptocurrency.
Bitcoin reached a 21-month pinnacle at $45,532, registering a staggering 156% surge in 2023, representing its most robust annual performance since 2020. Currently, it maintains an ascent of 2.5%, settling at $45,318, though it remains notably distant from the all-time high of $69,000 recorded in November 2021.
Ether, the digital coin associated with the ethereum blockchain network, displayed a 1.45% increase on Tuesday, reaching $2,386, following an impressive 91% surge throughout the preceding year.
The focal point for investors revolves around the imminent decision by the U.S. Securities and Exchange Commission (SEC) regarding the approval of a spot bitcoin exchange-traded fund (ETF). The potential green light for such ETFs could significantly broaden the accessibility of the bitcoin market, attracting investments on a massive scale.
While the SEC has previously rejected numerous applications for spot bitcoin ETFs, citing concerns about market vulnerability to manipulation, recent indicators suggest a shift in regulatory sentiment. Market observers anticipate a decision as early as January, with 13 proposed spot bitcoin ETFs under consideration.
Chris Weston, Head of Research at Pepperstone, highlighted the clear-cut market response in the event of rejection. Conversely, he pondered the potential for a “buy the rumor, sell-on-fact” scenario or a further upward surge in the event of approval.
Cryptocurrencies have also enjoyed a resurgence due to growing speculation that major central banks will implement interest rate cuts in the coming year. This positive outlook has helped dispel the gloom that enveloped the crypto markets following the collapses of FTX and other crypto-businesses in 2022.
Jupiter Zheng, Partner of Liquid Funds at HashKey Capital, expressed optimism about the crypto market’s prospects, citing key factors such as increased investment from spot ETFs, the Bitcoin halving, and a more accommodating global monetary policy in both the United States and worldwide.
