Bitcoin surged past the $45,000 mark, marking its highest point in almost two years, driven by mounting anticipation surrounding the potential approval of an exchange-traded fund directly linked to the cryptocurrency.
In a significant leap, the cryptocurrency soared by up to 4.3%, hitting its peak since April 6, 2022, and traded at $45,355 by 03:00 a.m. UTC time. Other cryptocurrencies also saw gains, with Ether, the second-largest token, rising by as much as 2.6%.
Since the start of December, Bitcoin has experienced a remarkable 20% surge, largely due to the nearing January 10 deadline for the US Securities and Exchange Commission (SEC) to decide on the approval of a spot ETF for Bitcoin.
The prospect of approval has triggered a sense of urgency among some US and European traders, leading to early purchases on New Year’s Day, according to Hayden Hughes, co-founder of the social-trading platform Alpha Impact.
Options traders have been banking on Bitcoin hitting the $50,000 mark, riding on the optimism surrounding the potential ETF approval.
Despite this surge, Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, believes that a significant downturn is unlikely, considering the prevailing bullish sentiment and the upcoming halving process that reduces Bitcoin miner rewards. She suggested that traders considering shorting Bitcoin would require nerves of steel.
Scheduled for April, the halving event occurs approximately every four years and has historically led to new price records for the cryptocurrency.
Bitcoin’s near 160% recovery last year somewhat repaired the damage caused by the steep crash in 2022. While the token outperformed global stocks and gold during this period, it still remains below its pandemic-era peak of nearly $69,000 in 2021.
