Crypto market roars into 2024: Bitcoin hits 21-month high

WEB DESK: In a robust start to the New Year, Bitcoin surged above $45,000 on Tuesday, marking its highest level since April 2022.

The optimism surrounding the potential approval of exchange-traded spot bitcoin funds contributed to this impressive rally.

Bitcoin reached a 21-month peak at $45,532, concluding a stellar 2023 with a remarkable 156 per cent gain, its strongest yearly performance since 2020.

As of the latest update, it was trading at $45,727, a 3.5 per cent increase, though still a distance from its record high of $69,000 in November 2021.

Ether, the cryptocurrency associated with the Ethereum blockchain network, also experienced a positive trajectory, rising by 2.6 per cent to $2,414 on Tuesday, following a substantial 91 per cent surge throughout 2023.

In US premarket trading, crypto-related stocks mirrored the upward trend in bitcoin prices. Companies such as Riot Platforms, Marathon Digital, and CleanSpark recorded gains ranging from 11.3 per cent to 14.8 per cent, rebounding from significant declines in the final trading days of 2022.

Notably, U.S. crypto exchange Coinbase witnessed a 6.3 per cent increase, while software firm and bitcoin investor MicroStrategy added 9.4 per cent.

The focus of investors remains on the potential approval of a spot bitcoin ETF by the US Securities and Exchange Commission (SEC).

Despite multiple rejections in the past, there is growing anticipation that some of the 13 proposed spot bitcoin ETFs could receive approval in early January.

The SEC, which has raised concerns about market vulnerability to manipulation, has shown signs of reconsideration in recent months.

Analysts, such as Chris Weston, Head of Research at Pepperstone, suggest that a rejection could lead to an immediate market decline, while approval raises questions about a “buy-the-rumour, sell-on-fact” scenario or the possibility of further upward momentum.

The positive sentiment in the crypto market is also attributed to rising expectations that major central banks will cut interest rates in the coming year.

This development has helped dispel the lingering gloom from the collapse of FTX and other crypto-business failures in 2022.

Looking ahead, there are optimistic projections for crypto markets in 2024, with Bitcoin historically performing well during US election years.

Markus Thielen, the founder of digital asset research firm 10x Research, notes the correlation with Bitcoin halving cycles in 2012, 2016, and 2020, suggesting potential for continued gains.

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