Bitcoin (BTC-USD) experienced a remarkable 16% surge over the past week, reaching an impressive multi-year high above $44,000 on Wednesday before settling at $43,358.98 on Thursday.
Crypto derivatives traders are actively engaging in speculative activities, particularly focusing on the early months of 2024, with a notable interest in call options at the $50,000 strike price for the end of January expiry. Calls provide traders with the right, though not the obligation, to buy the underlying asset at a predetermined price in the future, signaling an expectation that bitcoin’s market price will surpass $50,000.
The anticipation of a potential approval for a spot bitcoin ETF by the US Securities Exchange Commission in early 2024 has significantly contributed to the recent surge in bitcoin prices. Analysts believe this approval could pave the way for increased institutional investment in the cryptocurrency sector.
Another factor influencing the positive outlook is the upcoming bitcoin “halving” expected in April 2024. This event will halve the amount of new bitcoin generated, reducing the overall supply of the digital asset. If demand remains stable or increases, this reduction in supply could drive bitcoin’s price higher.
Investors are closely monitoring central banks’ monetary policy adjustments in 2024. Speculation suggests that the US Federal Reserve is likely to pause interest rates at its next meeting on December 13, potentially making riskier assets like cryptocurrencies more attractive if rates are cut in 2024.
Over the past week, the cryptocurrency market has witnessed a substantial influx of capital, with the total market capitalization reaching $1.6 trillion and the trading volume surging to $88.2 billion. Bitcoin, being the largest cryptocurrency, has captured the majority of this influx, expanding its market share to 51.3%, according to Coingecko data.
