For the first time in nineteen months, the value of Bitcoin exceeded the crucial mark of $40,000 (roughly Rs. 33.7 lakh) in terms of its pricing on Monday, December 4. The oldest cryptocurrency, that created its last all-time high of over $68,000 (roughly Rs. 56.6 lakh) in November 2021, had traded within the range of $26,000 (roughly Rs. 21.6 lakh) and $27,500 (roughly Rs. 22.9 lakh) for most months since May 2022.
Bitcoin finally launched into the upward curve earlier this October, because CoinTelegraph mistakenly ran a false story claiming that a spot BTC ETF was approved in the US – triggering immediate inflows into the crypto asset from investors. As of October 10, BTC was trading at $28,175 (roughly Rs. 23.4 lakh).
Within 24 hours, short positions on Bitcoin contracts worth $54 million (roughly Rs. 450 crore) were liquidated, significantly weakening the bearish forces. Members from the crypto industry, for now, seem elated at this bullish sentiment that currently envelops Bitcoin against market volatility affecting smaller altcoins.
“Bitcoin has experienced a substantial surge which represents a year-to-date peak for Bitcoin, boasting a remarkable 140 percent rise since the beginning of the year. The current uptrend is largely attributed to growing expectations that the SEC might approve a spot Bitcoin ETF in January. At the time of writing, Bitcoin is trading at $40,580 (roughly Rs. 33.8 lakh),” the trade desk at Zebpay told Gadgets360.
Asset management firm BlackRock was the first big company to file seeking permission to launch a spot BTC ETF in October. BlackRock's iShares ETF filing initiated a wave of similar submissions by other asset managers like WisdomTree, Invesco, and Fidelity, promising potential investment inflow.
The reason why ETFs (exchange traded funds) make for a lucrative investment tool for crypto outsiders is because they let investors to invest in BTC via traditional market exchanges rather than being limited to cryptocurrency exchanges.
As of now, the US Securities and Exchange Commission (SEC) has not given its verdict on ETF filings concerning BTC and ETH because it may risk the financial safety of investors. It is however anticipated that by January 2024, the SEC will give more clarity on the subject to applying crypto players.
In conversation with Gadgets360, Shivam Thakral, CEO of BuyUcoin pointed out another reason that may have nudged BTC to spike in value these past days.
“The US Fed is expected to cut the interest rate in 2024 and that may boost the liquidity in the market, we may be witnessing early signs of the same. The US Committee on Financial Services calling a December 8 hearing on digital assets may lead to a strong regulatory framework focussing on investor protection, which could prove highly beneficial for the broader digital asset market,” Thakral noted.
As per market analysts, given the potential for a recession in the US economy, fund managers are predicting an 80 percent consensus level for a trend of interest rate reduction in 2024, marking the highest consensus level ever recorded.
“The crypto market has already factored in this positive news. The market may undergo an overall accelerated upward revision. Furthermore, a new asset category within the Bitcoin ecosystem, ORDI, surged over the weekend, indicating a strong speculative sentiment in the market,” Ryan Lee, Chief Analyst of Bitget Research pointed out to Gadgets460.
With expectations of a forthcoming rate cut and growing confidence in Bitcoin ETF applications, traders are actively placing top-side options, betting on Bitcoin's potential ascent to $45,000 (roughly Rs. 37.4 lakh) by March 2024.
Bitcoin's market dominance, at the time of writing, stood at 52 percent as per CoinMarketCap.
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