Bitcoin Hits 19-Month Highs, Surpasses $40,000 Mark
Bitcoin, the world’s largest cryptocurrency, has quietly been making a significant comeback in the market, crossing the $40,000 mark for the first time this year. This recent surge on Monday in Asia was largely due to high expectations of a bitcoin exchange-traded fund approval and bets on U.S. interest rate cuts.
Surging Crypto Market
The world’s largest cryptocurrency saw a more than 4% surge on Monday in Asia, reaching a 19-month high and trading as high as $41,520. This marked the first time since May 2022 that bitcoin had surpassed the $40,000 level. Overall, the cryptocurrency has experienced a price increase of more than 145% since the beginning of the year.
Recovery After Past Scandals
This recent surge follows a tumultuous period for the cryptocurrency market, including the collapse of crypto exchange FTX toward the end of last year. In November, founder Bankman-Fried was found guilty of all seven criminal charges brought against him related to the collapse of his crypto empire.
Future Projections
Industry experts predict that with the revisiting of the $40,000 level, the next significant thresholds could be at $48,000 and $52,000. It was also reported by CNBC that U.S. Securities and Exchange Commission officials met with representatives from Grayscale, BlackRock, and the Nasdaq to discuss the potential conversion of the Grayscale Bitcoin Trust into an ETF.
Market Expectations and The Role of Federal Reserve
The recent approval expectations for a bitcoin ETF have boosted market confidence, and a fireside chat on December 1 by Federal Reserve Chairman Jerome Powell further influenced market expectations. Powell stated that it is too early to talk about cutting interest rates and that the central bank will be “keeping policy restrictive” until policymakers are sure that inflation is returning solidly to 2%. While there are expectations that the Fed may be done raising interest rates for now, Powell also indicated that it is “premature to conclude with confidence” that a sufficiently restrictive stance has been achieved, leaving room for the potential for more rate hikes.
In Conclusion
The surge in bitcoin prices reflects a positive turn for the cryptocurrency market amid various challenges in the past year. Additionally, the statements from Federal Reserve Chairman Jerome Powell have contributed to market expectations regarding U.S. interest rate policies, shaping the trajectory of the cryptocurrency market.
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