KEY POINTS
- Bitcoin Surges to $40,897 in Asia Time on Monday Morning, as per Coin Metrics Data.
- Bitcoin Surpasses $40,000 for the First Time in 2023, Fueled by Expectations of ETF Approval and Speculation on U.S. Interest Rate Reductions.
- Bitcoin has surged by over 145% since the beginning of the current year.
Bitcoin confidently surpassed the $40,000 milestone for the first time this year on Monday in Asia, fueled by the optimistic outlook for a bitcoin exchange-traded fund approval and speculation on U.S. interest rate cuts.
The world’s leading cryptocurrency exhibited a robust surge of over 4% in Monday’s Asian trading, reaching a 19-month high and peaking at $41,520 as of 12:30 am ET, as reported by Coin Metrics. Notably, this marks the first breach of the $40,000 level since May 2022, with Bitcoin boasting a remarkable 145% increase since the beginning of the year, according to LSEG.
This impressive rally comes in the wake of recent market upheavals, including the November 2022 collapse of the FTX crypto exchange. In the aftermath, FTX founder Bankman-Fried faced legal consequences, being found guilty of all seven criminal charges related to the downfall of his crypto empire.
Antoni Trenchev, co-founder of digital asset company Nexo, expressed confidence in Bitcoin’s trajectory, stating, “Now that $40,000 has been revisited for the first time in almost 19 months, $48,000 and $52,000 look to be the next significant lines in the sand.”
A noteworthy development contributing to market optimism is the reported meeting between U.S. Securities and Exchange Commission officials and representatives from Grayscale, BlackRock, and the Nasdaq. The SEC, in a memo, disclosed discussions with Grayscale regarding the potential conversion of the Grayscale Bitcoin Trust into an ETF. Despite the SEC’s initial blockage, Grayscale successfully challenged the decision in court, instilling confidence in the market that a bitcoin ETF might receive approval.
Anticipating the potential impact of a spot-Bitcoin ETF approval, Trenchev remarked, “How swiftly Bitcoin marches towards $50,000 might well depend on when a spot-Bitcoin ETF is approved, and even then, there’s no guarantee the much-anticipated nod from the SEC will put a rocket booster under the price.”
Federal Reserve Chairman Jerome Powell’s recent comments during a December 1 fireside chat also played a role in shaping market sentiment. Powell suggested that it’s premature to discuss interest rate cuts at present, emphasizing the Fed’s commitment to a restrictive policy until confident about inflation returning to the 2% target. While hinting at a potential slowdown in spending and output, Powell’s remarks created expectations that the Fed might have concluded its series of rate hikes, although he did not rule out the possibility of further hikes in the future.