Bitcoin rose above USD 45,000 today for the first time since April 2022. The world’s largest cryptocurrency was boosted by optimism related to the possible approval of investment spot bitcoin exchange-traded funds (ETFs), Reuters reported. Bitcoin rallied 156 percent last year, its best performance since 2020.
Far from the maximum
During Asian trading, the bitcoin rate reached 45,532 USD, later it erased some of the gains, but it is still strengthening. However, it remains far from the record high of $69,000 it touched in November 2021.
Investors are mainly focused on whether the US securities regulator will soon approve an ETF with physical bitcoin holdings. These funds would open up the bitcoin market to millions more users and attract billions in investment.
The U.S. Securities and Exchange Commission (SEC) has rejected several requests to launch spot bitcoin ETFs in recent years, arguing that the cryptocurrency market is prone to manipulation. But in recent months, there have been growing signs that regulators are ready to authorize at least a few of the 13 proposed funds. It is expected that a decision will likely be made early this month.
Downfall?
If all these funds are rejected, bitcoin is likely to experience an immediate drop, said Chris Weston of research firm Pepperstone. However, if the funds are approved, according to him, further development on the market is a question. There may be a scenario of speculative purchases with the expectation of currency growth, or a scenario of immediate sales of the investment by traders after the announcement of the decision, or this may support the currency in further growth.
Cryptocurrencies are also buoyed by growing bets that major central banks will cut interest rates this year. This could improve sentiment towards cryptocurrencies, which have been rocked by previous FTX crashes and the failures of some cryptocurrency firms in recent years, according to analysts.
Source: ČTK
