In the past 24 hours, Bitcoin surged past $40,000 for the first time since May 2022, signaling a strong recovery for the leading digital currency.
The surge is driven by hopes for lower interest rates and a rise in demand for exchange-traded funds (ETFs).
As of Monday morning, Bitcoin’s price reached $41,707, indicating a remarkable 145% growth in 2023.
The digital currency had last seen such heights before the TerraUSD project collapsed. This incident triggered a downturn across the digital asset sector.
Growing investor confidence is linked to changes in the Federal Reserve’s strategy. With inflation decelerating, the focus shifts to possible rate reductions next year.
This change is boosting global markets.
The digital asset sector eagerly awaits decisions from the U.S. Securities and Exchange Commission (SEC).
Companies like BlackRock are seeking to launch the first Bitcoin ETFs in the U.S. Bloomberg Intelligence predicts some of these funds might get the green light by January.
Market analyst Tony Sycamore notes that Bitcoin’s strength is buoyed by prospects of SEC’s ETF approval and forecasted Federal Reserve rate cuts in 2024.
Bitcoin has shown resilience
He also identifies $42,330 as a critical level to monitor. Bitcoin has shown resilience despite last year’s crypto market collapse.
It has weathered regulatory challenges in the U.S., including the arrest of Sam Bankman-Fried for FTX fraud and scrutiny of Binance and its CEO, Changpeng Zhao.
Cryptocurrency enthusiasts view these regulatory actions and the influx of ETF proposals as signs of an evolving industry. They anticipate a broader acceptance of digital currencies.
Nevertheless, Bitcoin and others like Ethereum and BNB remain below their highest values reached during the pandemic.
Bitcoin’s peak was nearly $69,000 in November 2021.
This situation highlights the cryptocurrency market’s volatility and its responsiveness to diverse economic and regulatory influences.