Tuesday, December 05, 2023
By
Web Desk

Record Bitcoin surge in 20 months

Bitcoin rocketed beyond $41,000 for the first time in over a year despite this rollercoaster, indicating an astounding 150% growth in its value this year alone

By
Web Desk
The photo shows a physical imitation of a Bitcoin in Dortmund, western Germany. — AFP file
The photo shows a physical imitation of a Bitcoin in Dortmund, western Germany. — AFP file

Financial markets were rocked on Monday when gold made an incredible turnaround after hitting an all-time high above $2,100 an ounce, while conventional stocks and bonds had a turbulent day. 

The world's largest cryptocurrency, Bitcoin, however, rocketed beyond $41,000 for the first time in over a year despite this rollercoaster, indicating an astounding 150% growth in its value this year alone.

For Bitcoin, the cryptocurrency world has been a volatile place. After emerging from the epidemic at little over $5,000, it shot up to about $68,000 in November 2021, but then fell precipitously as a result of several rate hikes by the Federal Reserve and the collapse of FTX, a prominent player in the cryptocurrency market. 

However, a comeback occurred on Monday, propelled by optimism over possible US Securities and Exchange Commission (SEC) clearance for exchange-traded funds (ETFs) to invest directly in Bitcoin.

Senior director at Moody's Analytics Yiannis Giokas noted that the increase in applications for spot BTC ETFs, which are expected to receive SEC clearance soon, is directly related to the rise in the price of Bitcoin. Bitcoin has been reviving due to this speculation, and it reached its highest level since April 2022 at $42,144 earlier in the day before settling at $41,803 around 4 p.m. in New York.

The cryptocurrency sector encompassed more than just Bitcoin's explosive growth. Dogecoin, Bitcoin Cash, and Ether all saw significant increases. 

US companies related to cryptocurrencies were able to buck the general trend in the market, as evidenced by the 5.5% surge in Coinbase Global Inc., the 8.6% increase in Marathon Digital Holdings Inc., and the 6.7% increase in Bitcoin proxy MicroStrategy Inc.

The industry is anxiously awaiting the results of applications from significant financial institutions, such as BlackRock Inc., to introduce the first Bitcoin ETFs in the US, and the anticipation is palpable. There is optimism in the industry despite previous regulatory obstacles and crackdowns, indicating possible maturity and wider investor engagement.

Despite Bitcoin's phenomenal rise, worries still exist. Changes in expectations for interest rates or issues with the expected ETFs might potentially cause the present rise to implode. Concerns about the sustainability of Bitcoin's current gain are also raised by technical indications, which suggest that the rally may have reached overextended levels.