In a resounding comeback, Bitcoin has breached the $40,000 mark for the first time this year, reaching a high of $41,522 on Monday. The cryptocurrency’s resurgence is attributed to a wave of momentum fueled by widespread optimism regarding potential U.S. interest rate cuts. Traders are also eagerly anticipating the approval of U.S.-stockmarket traded bitcoin funds, which has contributed to the renewed enthusiasm in the crypto market.
The rally, representing a remarkable 50% surge since mid-October, signifies a significant departure from the bearish sentiment that lingered throughout 2022 and early 2023. Justin d’Anethan, Head of Business Development for Asia-Pacific at Keyrock, a digital assets market-making firm, noted that evidence of institutional buying in November indicates a renewed wave of interest. While acknowledging the possibility of reversals, d’Anethan suggests that the lows experienced around $16,000 a year ago likely marked the bottom. The positive trajectory of Bitcoin is further bolstered by a broader market trend, with riskier investments and interest-rate sensitive assets like gold also experiencing a notable uptick, fueled by expectations that the U.S. Federal Reserve has completed rate hikes and is poised to cut rates in early 2023. Additionally, reports in October revealing that the U.S. Securities and Exchange Commission will not appeal a court ruling regarding the rejection of a Bitcoin exchange-traded fund application have heightened expectations of an imminent approval.