Jan 1, 2024
Bitcoin Rises to Highest Level in 21 Months on ETF Approval Hope
Bloomberg News
,(Bloomberg) -- Bitcoin surpassed $45,000 for the first time in nearly two years as anticipation of an approval of an exchange-traded fund investing directly in the biggest token intensified.
The cryptocurrency jumped as much as 5.2% to its highest level since April 2022 and traded at $45,063 as of 3 p.m. New York time. Other tokens were mixed with Ether, the second biggest, rising as much as 4.1%, and recent high-flyer Solana down 2.2%.
Bitcoin has jumped almost 20% since the start of December as a Jan. 10 deadline for the US Securities and Exchange Commission to give its blessing for a spot ETF Bitcoin draws closer.
“The markets are continuing to rally on strong belief that a Bitcoin ETF will soon be allowed to come to market in the US,” said Darius Tabatabai, co-founder of decentralized exchange Vertex Protocol. “Typically, such an event is a buy-the-rumor, sell-the-news type of thing, and this appears to be no exception.”
Read more: Why Crypto Is Counting on Spot Bitcoin ETFs: QuickTake
‘Nerves of Steel’
Options traders had been betting on Bitcoin hitting $50,000, riding on the spot ETF optimism.
A major correction is unlikely given the broader bullish sentiment and the upcoming halving, said Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, referring to a process that cuts the quantity of Bitcoin that miners receive per block reward in half. “I think traders would need nerves of steel to short BTC,” she said.
The halving – sometimes referred to as halvening – is planned for April and happens once every four years or so. The coin hit records after each of the last three halvings.
Read: What Is Bitcoin ‘Halving’? Does It Push Up the Price?: QuickTake
Bitcoin’s near 160% rebound last year partially repaired some of the damage caused by a precipitous 2022 crash that reverberated around the crypto industry. The token outperformed global stocks and gold over the period but remains below its 2021 pandemic-era record of almost $69,000.
Shares of so-called crypto companies were also mixed. Bitcoin proxy MicroStrategy rose about 87%, while miner Marathon Digital declined 2.3% and crypto exchange Coinbase Global fell 9.5%.
--With assistance from Muyao Shen.
(Updates prices, adds background and comments below chart)
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