Commencing the year 2024 with a robust surge, Bitcoin surpassed the $45,000 mark for the first time since April 2022. This notable increase was attributed to escalating geopolitical tensions in the Red Sea and growing optimism surrounding the potential approval of a Bitcoin exchange-traded fund. According to Coin Metrics, the world’s largest cryptocurrency achieved an intraday high of $45,913.30 early on Tuesday, marking its highest level since April 5, 2022. This breakthrough above the $45,000 threshold signifies a positive shift in its value. At the time of the latest report, Bitcoin was trading at $44,952.89, reflecting an increase of nearly 3%.
The rise in Bitcoin’s value underscores its established role as a hedge against uncertainty, a characteristic investors became accustomed to last year. Recent events, such as the attack on a Maersk vessel by Houthi militants over the weekend, have contributed to the heightened sense of instability. While much of Bitcoin’s six-month rally is linked to the anticipation of a potential exchange-traded fund (ETF), an earlier catalyst was the regional banking crisis in the U.S. This crisis initially fueled Bitcoin’s significant gains for the year, positioning the cryptocurrency as an alternative to the existing legacy system and a reliable hedge against uncertainties.
The development coincides with ongoing enthusiasm among traders anticipating the potential approval of the first bitcoin exchange-traded fund (ETF) in the U.S. Such approval would enable investors to purchase a product mirroring the price of bitcoin without the necessity of directly owning the cryptocurrency. This prospect is particularly appealing to larger institutional investors.
On Friday, BlackRock and other prospective issuers revised the registration forms for their proposed bitcoin ETFs, providing additional information such as the names of authorized participants. Investors interpret this added detail as a sign that a decision from the U.S. Securities and Exchange Commission is imminent. Industry experts widely anticipate the approval of the funds in January. The sustained increase in bitcoin’s value follows a robust performance in 2023, with the digital coin’s price surging by 157%. Many anticipate this upward trend to persist.
Expectations are optimistic among investors for Bitcoin’s performance in 2024. The anticipated decision on an ETF is widely foreseen to materialize in January. Following closely, in the spring, the Bitcoin halving is anticipated, historically preceding significant price upswings. Additionally, Federal Reserve officials are projecting at least three interest rate cuts this year, marking a shift after nearly two years of hikes that impacted the cryptocurrency negatively. On Tuesday, other cryptocurrencies also experienced upward movements, with Ether trading at approximately $2,367, reflecting an increase of about 1%.
