Bitcoin achieved a 21-month high, reaching $45,922, on Tuesday.
Bitcoin, the world’s largest cryptocurrency by market capitalization, has triumphantly surged past the $45,000 mark for the first time since April 2022, Reuters reported. This significant rise marks the beginning of 2024 with a robust performance, driven largely by the market’s optimism regarding the potential approval of exchange-traded spot bitcoin funds (ETFs).
On Tuesday, Bitcoin achieved a 21-month high, reaching $45,922, an impressive feat considering its 156% gain in the previous year, its strongest annual performance since 2020. Despite this surge, Bitcoin’s current price of $45,509 remains below its all-time high of $69,000 set in November 2021. The second-largest cryptocurrency, Ethereum, also witnessed an uptick, rising 1.2% to $2,386.50, following a 91% surge in 2023.
Cryptocurrency stocks have mirrored Bitcoin’s ascent. Companies like Riot Platforms, Marathon Digital, and CleanSpark experienced gains between 7% and 10%. Similarly, MicroStrategy, a software firm and significant Bitcoin investor, saw a 13.4% increase in its stocks. The ProShares Bitcoin Strategy ETF, tracking Bitcoin futures, also enjoyed a 7.8% rise.
The focus among investors is heavily on the U.S. Securities and Exchange Commission’s (SEC) decision regarding the approval of a spot Bitcoin ETF. Such an approval is anticipated to significantly broaden market accessibility, attracting billions of dollars in investments. Historically, the SEC has been cautious, citing concerns about market manipulation. However, recent developments suggest that regulators might approve some of the 13 proposed spot Bitcoin ETFs, with a decision expected early in January.
Adding to Bitcoin’s momentum is the expectation that major central banks will reduce interest rates this year, alleviating the gloom cast over the crypto markets due to the collapse of FTX and other crypto businesses in 2022. Analysts also note that Bitcoin tends to perform well during U.S. election years, coinciding with Bitcoin halving cycles. The 2024 United States Presidential elections are scheduled to be held in early November.
