In a notable market development, Bitcoin (BTC) surged beyond the $41,000 mark, marking its highest value since May 2022. Concurrently, Ethereum (ETH) also experienced an upswing, surpassing $2,200. This rally, albeit moderate, resonates across the broader cryptocurrency market.
The ascent in Bitcoin’s price, breaching $41,510 as of the latest data, represents a substantial gain of about 3% within 24 hours. Ethereum, mirroring this positive trend, recorded a comparable percentage rise, with its current value at $2,250. While other top-10 cryptocurrencies witnessed more modest gains, BNB coin, affiliated with the Binance exchange, exhibited a slight 0.1% decline over the same period.
The crypto market’s recent momentum can be attributed to various factors. Bitcoin had previously dipped below $40,000 in April 2022 but has been on an upward trajectory, bolstered by optimistic remarks from U.S. central bankers. Additionally, expectations surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the U.S. have contributed to the positive sentiment.
Ethereum, having not surpassed $2,200 since May 2022, has seen renewed strength in its value, aligning with the broader market surge. Recent data indicates that Bitcoin holders withdrew 37,000 BTC between Nov. 17 and Dec. 1, signaling a preference for direct custody of their assets.
The surge in Bitcoin’s value coincided with gold reaching a record high of over $2,100 per ounce, prompted by dovish comments from Federal Reserve chairman Jerome Powell. Analysts suggest that the market is anticipating a potential rate cut in the coming year, contributing to increased bullish sentiment regarding Bitcoin ETF applications.
Lucy Hu, Senior Analyst at Metalpha, remarked, “This is an official statement of a bull run, and the price could see more upticks in the coming weeks.” Powell’s recent statement about interest rates being well into restrictive territory has further fueled expectations of a rate cut, impacting Treasury yields and positively influencing both crypto and gold markets.
Traders, anticipating a further surge, have engaged in topside option plays, projecting Bitcoin’s potential rise to $45,000 by March 2024. Looking ahead, economic data releases, including U.S. ISM services PMI and non-farm payrolls for December, could influence market dynamics. A robust non-farm payrolls figure might impact Fed rate cut expectations for 2024, potentially slowing Bitcoin’s ascent.
Nevertheless, Standard Chartered Bank’s forecast predicts Bitcoin’s price will reach $100,000 by the end of 2024. The bank’s optimism is fueled by the potential approval of U.S.-based spot Bitcoin ETFs, a development they anticipate to happen sooner than initially expected, adding to the positive sentiments surrounding Bitcoin’s future trajectory and contributing to the ongoing market rally.