Expectations for first US spot Bitcoin ETFs propelling rally
Crypto market also benefiting from hopes for Fed rate cuts
Bitcoin hit $40,000 for the first time since May 2022 as the largest digital asset extended this year’s rebound on expectations of interest-rate reductions and greater demand from exchange-traded funds.
The token traded at $40,099 as of 6:35 a.m. on Monday in Singapore, taking its 2023 jump to 142%. Bitcoin was last at $40,000 before the TerraUSD stablecoin collapse that contributed to a rout in digital assets and a daisy chain of collapses in the crypto sector.
Investors are increasingly convinced the Federal Reserve is done with rate hikes as inflation cools, turning the focus to the likely extent of cuts next year. The changed backdrop has fueled a rally across global markets.
The digital-asset industry is also awaiting the outcome of applications from the likes of BlackRock Inc. to launch the first US spot Bitcoin ETFs. Bloomberg Intelligence expects a batch of such funds to win Securities & Exchange Commissionapproval by January.
“Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. Technical chart patterns point to $42,330 as the next level to watch for, he added.
Bitcoin’s rebound from last year’s crypto crash has weathered a US crackdown that put Sam Bankman-Fried behind bars for fraud at FTX and handed top crypto exchange Binance and its founder Changpeng Zhao rap sheets and big fines. For optimists, the drive to curb questionable practices and the flurry of ETF applications point to a maturing industry and the potential for wider crypto adoption.
Even so, Bitcoin as well as smaller tokens such as Ether and BNB remain some way below the records they hit during the pandemic-era bull run in crypto. The largest token peaked at almost $69,000 in November 2021.
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