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Bitcoin, the world's largest cryptocurrency, made a remarkable comeback on Tuesday, surpassing the $45,000 mark for the first time since April 2022. This surge in price has sparked optimism among investors, driven by the possibility of approval for exchange-traded spot Bitcoin funds.
Impressive Yearly Performance for Bitcoin
With a staggering gain of 156% last year, Bitcoin delivered its strongest annual performance since 2020. Reaching its highest point in 21 months at $45,532, this cryptocurrency continues to make waves in the market. Although currently at $45,318, it remains a considerable distance from its record-high of $69,000, achieved in November 2021.
Ether, the coin associated with the ethereum blockchain network, also experienced a substantial increase. On Tuesday, it grew 1.45% and reached $2,386 after soaring by 91% in 2023. This rise in value indicates a positive trend for cryptocurrencies as a whole.
Spotlight on the Sec Approval for Bitcoin ETFs
Reuters reported that the focus of investors has shifted to whether the U.S. Securities and Exchange Commission (SEC) will finally approve a spot Bitcoin ETF.
If approved, this move would open the Bitcoin market to millions of new participants, potentially attracting billions in investments. Despite previous rejections due to concerns about market manipulation, recent indications suggest a higher likelihood of approval. According to The Inquirer, the decision will be announced in early January.
Market analysts predict that rejecting the spot Bitcoin ETF applications would significantly decrease Bitcoin's price. On the other hand, if the SEC gives the green light, the market's response remains uncertain. It could lead to a "buy the rumor, sell-on-fact" scenario or potentially prompt another upward surge in Bitcoin's value.
In addition to the prospects of Bitcoin ETF approval, other vital factors drive growth in the cryptocurrency market. Rising expectations of interest rate cuts by major central banks have provided a significant boost. This positive sentiment has helped dispel the gloom that prevailed throughout 2022 following the collapse of FTX and other crypto-business failures.
Experts anticipate notable growth for the crypto market this year. Factors such as the influx of investment funds from spot ETFs, the Bitcoin halving event, and a more accommodative monetary policy in the United States and worldwide are expected to play a crucial role. Jupiter Zheng, partner of liquid funds at HashKey Capital, affirms this positive outlook.
Photo: Michael Förtsch on Unsplash
