Bitcoin Reaches $40,000 for the First Time in 2023 amid U.S. Interest Rate Cuts Anticipation
Bitcoin, the world’s biggest currency, has broken above $40,000 for the first time this year, riding a wave of momentum fueled by widespread enthusiasm about U.S. interest rate cuts and anticipation of the imminent approval of U.S.-stockmarket traded bitcoin funds.
Bitcoin Hits $40,210 in Sunday Trade
In Sunday trade, Bitcoin surged to as high as $40,210, its highest level since April 2022. By Monday, in thin trade early in the Asia day, it steadied at $40,011, signaling a possible sustained upward trend.
Analyst Kyle Rodda’s View
“We’ll see if it sticks throughout the day, but bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum,” said Capital.com analyst Kyle Rodda, expressing his optimism about the surge.
Bitcoin’s Year-Over-Year Growth
This year, Bitcoin has more than doubled in value as it rebounds from the doldrums of the so-called “crypto winter” that followed notable scandals and the collapse of exchange FTX last year.
Market Rally on Anticipation of U.S. Interest Rate Cuts
Risky investments and other interest-rate sensitive assets, such as gold, have also rallied strongly in recent weeks as markets bet that the U.S. Federal Reserve has completed rate hikes and will initiate cuts in early 2023.
Driving Factors of Bitcoin Surge
Reports in October revealed that the U.S. Securities and Exchange Commission will not appeal a court ruling that found the agency had been incorrect in rejecting an exchange-traded fund application from crypto firm Grayscale Investments. This development has fueled beliefs that an eventual approval of such funds is imminent.
Bitcoin ETF Potential Impact
A spot bitcoin ETF, if approved, would provide previously hesitant investors with access to crypto through the stock market, potentially ushering a new wave of capital into the sector.
Ether Hits 1-1/2 Year High
In addition to Bitcoin’s surge, ether, the coin linked to the Ethereum blockchain network, also reached a 1-1/2 year high on Sunday, hitting $2,218 and steadying at $2,197 in Asia on Monday.
Bitcoin and Ether Historical Records
While both Bitcoin and Ether have experienced significant growth, they remain well below their 2021 record highs that exceeded $60,000 and $4,000, respectively.
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