With betting on U.S. interest rate drops and expectations of the establishment of a bitcoin exchange-traded fund, bitcoin crossed the $40,000 threshold for the first time this year on Monday in Asia.
Using data from Coin Metrics, the biggest cryptocurrency in the world saw an almost 4% increase on Monday in Asia, reaching a 19-month high. As of 12.30am ET, it was trading at $41,520. Bitcoin has not crossed the $40,000 barrier since May 2022, according to LSEG. Since the year began, Bitcoin has increased by about 145%.
This comes after other scandals that shook the industry, such as the fall of the cryptocurrency exchange FTX in November of last year. The seven criminal allegations brought against FTX founder Bankman-Fried in connection with the demise of his cryptocurrency empire were all dismissed last month.
Antoni Trenchev, co-founder of digital asset business Nexo, stated, “Now that $40,000 has been addressed for the first time in almost 19 months, $48,000 and $52,000 look to be the next important lines in the sand.”
U.S. Securities and Exchange Commission executives met with representatives from Grayscale, BlackRock, and the Nasdaq, according to a CNBC story last week. The Grayscale Bitcoin Trust may be converted into an exchange-traded fund (ETF), according to a memo the SEC said it met with Grayscale on Thursday. This manoeuvre had previously been barred by the SEC, but Grayscale successfully challenged that ruling in court.
This increased investor confidence that an ETF backed by bitcoin would someday be approved, driving up the cost of the biggest cryptocurrency in the world.
“The rate at which Bitcoin approaches $50,000 may very well depend on the approval of a spot-Bitcoin ETF, and even then, there’s no assurance that the much anticipated SEC approval will put a rocket booster under the price,” Trenchev wrote.
In a fireside chat on December 1, Chairman of the Federal Reserve Jerome Powell stated that the central bank will be “keeping policy restrictive” until officials are certain that inflation is steadily returning to 2%. Powell added that it is too soon to discuss interest rate reductions at this time.
“Like most forecasters, my colleagues and I expect that over the following year, growth in expenditure and output will decline as the pandemic’s impacts and the reopening fade and as restrictive monetary policy weighs on aggregate demand,” the transcript stated.
Source (CNBC)
