Bitcoin has broken the psychological barrier of $40,000 for the first time this year, riding a wave of momentum due to broad enthusiasm about U.S. interest rate cuts and anticipation for the imminent approval of U.S.-stockmarket traded bitcoin funds.
On Sunday, the world’s biggest currency hit as high as $40,210, its highest since April 2022, and was steady at $40,011 in thin Monday morning Asia trade.
“We’ll see if it sticks throughout the day, but bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum,” said Capital.com analyst Kyle Rodda.
Since the start of the year, Bitcoin has more than doubled, recovering from the doldrums of the so-called “crypto winter” that followed scandals including the collapse of exchange FTX last year. Riskier investments and other interest-rate sensitive assets, such as gold, have also rallied over the last few weeks as markets wager that the U.S. Federal Reserve has finished hiking rates and will begin cutting in early 2023.
In October, reports suggested that the U.S. Securities and Exchange Commission wouldn’t appeal a court ruling that found the agency had been wrong to reject an exchange-traded fund application from crypto firm Grayscale Investments, driving bets that an eventual approval is nigh. If a spot bitcoin ETF is approved, it would allow previously wary investors access to crypto via the stock market and usher in a new wave of capital into the sector.
Ether, the coin linked to the Ethereum blockchain network, also made a 1-1/2 year high on Sunday, hitting $2,218 and steadying at $2,197 in Asia on Monday. However, both bitcoin and ether remain well below their 2021 record highs that were above $60,000 and $4,000 respectively.
Reporting by Nilutpal Timsina in Bengaluru and Brigid Riley in Tokyo; Editing by Lisa Shumaker, Chizu Nomiyama and Sonali Paul, our standards are The Thomson Reuters Trust Principles. There is also an option to Acquire Licensing Rights, which opens in a new tab.
