Bitcoin has broken above $40,000 for the first time in 2023 as traders anticipate the imminent approval of the United States stockmarket traded bitcoin funds.
Bitcoin, the world’s biggest cryptocurrency, hit $41,522 on Monday, December 4, its highest since April 2022, and has seemed to cast off the funk that had settled over crypto markets since the collapse of FTX and other crypto-business failures in 2022.
A 50 per cent rally since mid-October has “seemed to mark a decisive shift away from the bearishness of 2022 and early 2023,” Justin d’Anethan, the head of business development for Asia-Pacific at Keyrock, a digital assets market-making firm, told Reuters.
He said evidence of institutional buying through November showed a new leg of interest and that although reversals ahead are not inconceivable, lows hit around $16,000 a year ago “probably marked the bottom”.
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Bitcoin-investor Microstrategy last week disclosed it bought an additional $593 million in bitcoin in November.
Meanwhile, riskier investments and other interest-rate sensitive assets, such as gold, have also rallied hard over the last few weeks as markets wager that the U.S. Federal Reserve has finished hiking rates and will start cutting early in 2023.
Reports in October that the U.S. Securities and Exchange Commission won’t appeal a court ruling that found the agency had been wrong to reject an exchange-traded fund application have also driven bets that an eventual approval is nigh.
A spot bitcoin ETF could allow previously wary investors access to crypto via the stock market, ushering a new wave of capital into the sector.
Ether, the coin linked to the Ethereum blockchain network, also made a 1-1/2 year high on Monday, hitting $2,253.
Both bitcoin and ether remain well below their 2021 record highs that were above $60,000 and $4,000, respectively.
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