The year 2024 started with good news for cryptocurrency enthusiasts and investors: Bitcoin surpassed $45,000 today, for the first time since April 2022, marks a recovery after a period of volatility and uncertainty.
The value of Bitcoin, the most well-known and widespread cryptocurrency, reached a peak of $45,532, an increase of 156% from the previous year, his best annual result since 2020. It remains far from the record high of $69,000 it hit in November 2021, but shows continued resilience and demand in the global market.
Why Bitcoin Rises Above $45,000
According to experts, one of the factors that contributed to the increase in the price of Bitcoin is the optimism surrounding it possible approval of exchange-traded funds (ETFs) based on Bitcoin in the United States. ETFs are financial instruments that allow investors to buy and sell shares of a fund that tracks the performance of an underlying index, sector or asset, such as Bitcoin.
Bitcoin-based ETFs could make it easier and safer for institutional and retail investors to access the cryptocurrency market, increasing bitcoin’s liquidity and legitimacy. However, Securities and Exchange Commission (SEC), the American financial market regulator, has so far turned down several requests to launch bitcoin-based ETFsciting concerns about market manipulation, custody of funds and investor protection.
According to the forward-looking analysis of a specialized portal Check Mr, “2024 promises to be a defining period for Bitcoin and crypto-assets. The prospect of new highs for Bitcoin to surpass $69,000 in November 2021 is a real possibility, despite the expected volatility and possible retracements. Some analysts are even making a bold prediction that it will exceed $100,000.”
We further read in a prospective framework, “The horizon of 2024 is looming under the banner of a bullish trend in the cryptocurrency market. The market outlook is further supported by the prediction that interest rates will decrease in 2024, creating a favorable climate for investing in digital assets. Also halving bitcoin (i.e. an internal blockchain mechanism that halves the reward given to miners for each verified block, ed.), scheduled for May 2024, supports positive expectations and reinforces the consolidated bullish trend associated with this phenomenon.
“While quantitatively the halving is becoming less relevant, historically it has always coincided with significant price peaks.”explains Ferdinando Ametrano, co-founder and CEO of CheckSig.
ETF approval pending
Several investment firms hoping to be among the first to win regulatory approval have filed new documents with regulators outlining how agreements made with their market makers ensure liquidity and trading efficiency. They are BlackRock Asset Management, VanEck, Valkyrie Investments, Bitwise Investment Advisers, Invesco Ltd, Fidelity, WisdomTree Investments and a joint venture formed by Ark Investments and 21Shares. The American Consob has until January 10 to evaluate whether it will give the green light to the management companies’ application.
“Crypto will see significant growth this year, with the influx of ETF investment funds, the Bitcoin halving, and more accommodative monetary policy both in the US and globally as key drivers”confirmed to Reuters Jupiter Zheng OF HashKey Capital.