Home Crypto News Bitcoin reaches its highest level since April 2022, breaking $40,000 as momentum grows

Bitcoin reaches its highest level since April 2022, breaking $40,000 as momentum grows

by Michael Stark

Bitcoin Surges Above $40,000 on Enthusiasm for U.S. Interest Rate Cuts

Bitcoin has broken above $40,000 for the first time this year, reaching a high of $40,210 in Sunday trade, its highest since April 2022. This surge comes amid broad enthusiasm about U.S. interest rate cuts and anticipation of the imminent approval of U.S.-stockmarket traded bitcoin funds.

Momentum Driven by Enthusiasm and Anticipation

“We’ll see if it sticks throughout the day, but bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum,” said Capital.com analyst Kyle Rodda. This statement reflects the growing excitement and momentum surrounding the cryptocurrency, which has more than doubled for the year.

Potential Approval of U.S. Stock Market Traded Bitcoin Funds

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 from crypto firm Grayscale Investments have also driven bets that an eventual approval is nigh. The potential approval of U.S.-stockmarket traded bitcoin funds is seen as a significant development that could usher in a new wave of capital into the sector.

Ether Also Reaches 1-1/2 Year High

In addition to bitcoin’s surge, ether, the coin linked to the Ethereum blockchain network, also made a 1-1/2 year high on Sunday, hitting $2,218. Both bitcoin and ether remain well below their 2021 record highs of above $60,000 and $4,000, respectively.

Market Enthusiasm for U.S. Interest Rate Cuts

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. This market enthusiasm for U.S. interest rate cuts has contributed to the surge in bitcoin and other assets like gold.

Outlook for Bitcoin

The recent surge in bitcoin underscores its resilience, as it has thrown off the doldrums of the so-called “crypto winter” that followed scandals including the collapse of exchange FTX last year. Analysts will be closely watching to see if bitcoin can maintain its upward momentum and continue to break new ground in the coming days.

You may also like