Bitcoin broke above $40,000 for the first time since May 2022, fueled by factors such as U.S. interest rate cuts and expectations of approval for U.S. stock market-traded bitcoin funds. The surge continued as the largest cryptocurrency reached a high of $41,748. This renewed momentum in the crypto market follows negative events in the past like the collapse of FTX and other crypto businesses.
The 50% rally from mid-October indicates a turning point from the bearish trends experienced in 2022 and early 2023. Market makers, such as Keyrock’s Justin d’Anethan, believe that the increased institutional buying throughout November signals a fresh wave of interest in digital assets. Although price reversals cannot be ruled out, the lows of around $16,000 seen a year ago are likely in the past.
Microstrategy, a known Bitcoin investor, disclosed purchasing an additional $593 million in bitcoin during November. Other investments and assets believed to be sensitive to interest rates, including gold, have experienced significant rallies in recent weeks as expectations of the U.S. Federal Reserve cutting rates early in 2024 increase.
The crypto markets have also been influenced by reports suggesting that the U.S. Securities and Exchange Commission (SEC) may soon approve an exchange-traded fund application. A bitcoin ETF would provide investors with easier access to cryptocurrencies through the stock market, attracting more capital into the sector.
Positive developments within the industry, such as the settlement of a long-standing U.S. criminal investigation into Binance, the world’s largest crypto exchange, have further supported the market’s momentum. Following the settlement, Binance’s founder Changpeng Zhao stepped down, allowing the company to continue operating.
Ethereum’s native digital currency, ether, followed suit, reaching a one-and-a-half-year high of $2,264. However, both bitcoin and ether remain below their all-time highs of $69,000 and $4,868, respectively, achieved back in 2021.
