For the first time in nineteen months, Bitcoin's value crossed the crucial $40,000 mark (approximately Rs. 33.7 lakh) on Monday, December 4. $68,000 (approximately Rs. 56.6 lakh) in November 2021, traded within the range of $26,000 (approximately Rs. 21.6 lakh) and $27,500 (approximately Rs. 22.9 lakh) for most months since May 2022.
Bitcoin finally entered the upward curve earlier this October as Cointelegraph falsely published a false story claiming that a spot BTC ETF had been approved in the US, triggering an immediate influx of investors into the crypto asset. On October 10, BTC was trading at $28,175 (approximately Rs. 23.4 lakh).
Within 24 hours, short positions on Bitcoin contracts worth $54 million (approximately Rs. 450 crore) were liquidated, significantly weakening bearish forces. Crypto industry members seem to be excited for now about this bullish sentiment currently enveloping Bitcoin against the market volatility hitting smaller altcoins.
“Bitcoin has experienced a substantial increase that represents a year-to-date peak for Bitcoin, with a notable increase of 140 percent since the beginning of the year. The current upward trend is largely attributed to growing expectations that the SEC could approve a spot Bitcoin ETF in January. At the time of writing, Bitcoin is trading at $40,580 (approximately Rs. 33.8 lakh),” Zebpay's trading desk told Gadgets360.
Asset manager BlackRock was the first major company to apply for permission to launch a spot BTC ETF in October. BlackRock's iShares ETF filing sparked a wave of similar submissions from other asset managers such as WisdomTree, Invesco and Fidelity, promising a potential influx of investment.
The reason why ETFs (exchange traded funds) are a lucrative investment vehicle for crypto outsiders is because they offer investors the opportunity to invest in BTC through traditional market exchanges, rather than being limited to cryptocurrency exchanges.
So far, the US Securities and Exchange Commission (SEC) has not ruled on ETF applications involving BTC and ETH as it could jeopardize the financial safety of investors. However, the SEC is expected to provide more clarity on the topic of crypto players' application in January 2024.
Speaking to Gadgets360, Shivam Thakral, CEO of BuyUcoin, pointed out another reason that may have caused BTC to rise in value in recent days.
“The US Fed is expected to cut interest rates in 2024 and that could boost market liquidity. We may be witnessing the first signs of this. The U.S. Financial Services Committee holding a hearing on digital assets on December 8 could lead to a strong regulatory framework focused on investor protection, which could be highly beneficial for the broader digital asset market, Thakral said.
According to market analysts, given the potential for a recession in the US economy, fund managers are predicting an 80 percent consensus level for a rate cut trend in 2024, which is the highest consensus level ever.
“The crypto market has already processed this positive news. The market may undergo an overall accelerated upward revision. Additionally, a new asset class within the Bitcoin ecosystem, ORDI, surged this weekend, indicating strong speculative sentiment in the market,” Ryan Lee, principal analyst at Bitget Research, told Gadgets460.
With expectations of an impending interest rate cut and growing confidence in Bitcoin ETF applications, traders are actively placing options on the top shelf, betting on Bitcoin's potential rise to $45,000 (approximately Rs. 37.4 lakh) by March 2024.
Bitcoin's market dominance stood at 52 percent at the time of writing, according to CoinMarketCap.