Daisy Watts 
Dec 04, 2023
Bitcoin, the most traded cryptocurrency in the world, has crossed $40,000 for the first time in the current year.
The momentum is said to be driven by widespread optimism regarding potential US interest rate reductions and expectations of the impending approval of Bitcoin funds being traded in US stock market.
Bitcoin reached $41,522 to mark its highest value since April 2022, indicating a recovery from the downturn that affected crypto markets after the collapse of FTX and other crypto businesses last year. The development was reported by Reuters.
Read more: How to buy Bitcoin: Step-by-step guide on buying cryptocurrency
This 50% rally since mid-October has "seemed to mark a decisive shift away from the bearishness of 2022 and early 2023," said Justin d'Anethan - head of business development for Asia-Pacific at Keyrock, a digital assets market making firm.
Signs of institutional buying through November indicated a new spell of willingness and although reversals ahead are conceivable, dips touched close to $16,000 the previous year, "probably marked the bottom," he added.
Microstrategy, a Bitcoin investor, disclosed last week that it bought $593 million shares of Bitcoin in November.
Riskier investments, however, and other assets sensitive to interest rates, like gold, have experienced significant increases in the past few weeks. This is because the market believes the US Federal Reserve has completed its rate hikes and will likely start reducing rates early in 2024.
Reports indicated last month that the US Securities and Exchange Commission won't challenge a court ruling that found the agency was wrong to reject an application for an exchange-traded fund.
This has fueled expectations of an imminent approval. The potential approval of a spot bitcoin ETF is seen as a way for cautious investors to enter the crypto market through the stock exchange, bringing in fresh capital.
Ether, the cryptocurrency associated with the Ethereum blockchain network, reached a 1-1/2 year high at $2,253. However, both Bitcoin and Ether are still below their peak values in 2021, which exceeded $60,000 and $4,000, respectively.
