The price of bitcoin surged past $40,000 on Monday, reaching its highest level in 18 months as investors anticipate a lower interest rate environment and important regulatory approvals that could bring the cryptocurrency into the mainstream. Bitcoin, the most popular cryptocurrency globally, rose by more than 5% over the past 24 hours, trading at $41,600, according to data from CoinMarketCap.
Investor enthusiasm was fueled by remarks from Federal Reserve Chair Jerome Powell, who suggested that the central bank’s policy was “well into restrictive territory,” leading some to believe that interest rate hikes were coming to an end, although Powell emphasized that the Fed was prepared to raise rates if necessary.
Antoni Trenchev, co-founder of the crypto lender Nexo, noted, “Bitcoin breaking $40,000 isn’t as groundbreaking as the first time it happened in January 2021. Yet consider where we were a year ago, at $15,500, and this represents a significant upturn in fortunes for an asset that looked dead and buried.”
The rally also signals investors’ desire to move past recent scandals in the crypto world, including the guilty plea of Binance founder Changpeng Zhao on federal money-laundering charges and the conviction of FTX co-founder Sam Bankman-Fried for orchestrating a multibillion-dollar fraud.
Despite the surge, bitcoin remains a way off from its all-time high of $69,000 in November 2021, but is up 150% for the year. Anticipation is growing for the approval of a bitcoin-focused exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC), with a January 10 deadline looming for the approval of such funds. A spot bitcoin ETF would enable traditional investors to gain exposure to the digital asset without actually owning it, providing a means to capitalize on its volatile rallies without the complications of directly owning bitcoin.
The historic context surrounding bitcoin’s rise to prominence as a popular and valuable cryptocurrency could be mentioned here, noting its initial creation in 2009 and its subsequent fluctuations in value and regulatory scrutiny over the years. Additionally, the article could include potential future developments in the cryptocurrency space and their potential impact on the market.
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