Home Bitcoin News Bitcoin Hits 21-Month High Surpassing $45,000: What’s Driving the Cryptocurrency Surge in 2024?

Bitcoin Hits 21-Month High Surpassing $45,000: What’s Driving the Cryptocurrency Surge in 2024?

In a resounding start to the New Year, Bitcoin has soared to heights unseen since April 2022, breaching the $45,000 mark and signaling a promising trajectory for the world’s most prominent cryptocurrency. The surge, which marks a 21-month high, reflects a remarkable 156% surge in the previous year, positioning Bitcoin as a strong performer amidst the volatile landscape of digital assets.

This impressive ascent has investors buzzing with enthusiasm, largely fueled by growing optimism surrounding the potential approval of exchange-traded spot bitcoin funds. The prospect of such approval has injected renewed vigor into the market, propelling Bitcoin to hit $45,532, a notable achievement since its peak at $69,000 in November 2021. Presently, the cryptocurrency stands at $45,727, showcasing a 3.5% increase and hinting at further potential growth.

Ether, the cryptocurrency linked to the Ethereum blockchain, has also witnessed an upswing, reaching $2,414, reflecting a 2.6% surge on Tuesday and a substantial 91% surge throughout 2023.

The positive momentum extends beyond cryptocurrencies themselves, influencing related stocks and entities. U.S. premarket trading observed significant surges in crypto-related stocks, with Riot Platforms (NASDAQ: RIOT), Marathon Digital (NASDAQ: MARA), and CleanSpark (NASDAQ: CLSK) experiencing gains between 11.3% and 14.8%. Similarly, U.S. crypto exchange Coinbase (NASDAQ: COIN) saw a rise of 6.3%, while MicroStrategy, a software firm and Bitcoin investor, added 9.4% to its value.

Amidst this fervor lies a pivotal focal point for investors—the potential approval of a spot bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). While the SEC has previously rejected several applications for spot bitcoin ETFs, citing concerns about market susceptibility to manipulation, recent indications suggest a shift in regulatory sentiment. Speculations abound that a decision may emerge early in January, potentially opening the floodgates for increased investor participation and capital inflow into the market.

Chris Weston, Pepperstone’s head of research, highlights the dichotomy of potential outcomes: a rejection leading to an immediate market downturn or an approval triggering a “buy-the-rumor, sell-on-fact” scenario, or potentially fueling another upward surge.

Furthermore, market optimism finds support in the anticipation of major central banks reducing interest rates throughout the year. This prospect has served as a catalyst, dispelling the gloom that lingered after the crypto market’s turbulence due to the collapse of FTX and other crypto-businesses in 2022.

With a staggering 156% surge in 2023, Bitcoin’s remarkable performance outpaced its previous yearly records since 2020. Though currently trading at $45,727, it still trails behind its peak of $69,000 in November 2021.

Meanwhile, Ether, the coin associated with the ethereum blockchain network, also witnessed a notable uptick, rising 2.6% to $2,414 on Tuesday, following its 91% surge in 2023.

The surge in Bitcoin’s value spurred a corresponding surge in U.S. premarket trading of crypto-related stocks. Companies like Riot Platforms (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA), and CleanSpark (NASDAQ:CLSK) saw impressive gains ranging from 11.3% to 14.8%. Similarly, U.S.-based crypto exchange Coinbase (NASDAQ:COIN) rose by 6.3%, while MicroStrategy, a software firm and Bitcoin investor, observed a 9.4% increase.

All eyes are now fixed on the U.S. Securities and Exchange Commission (SEC) and its impending decision regarding spot bitcoin ETF approvals. Despite past rejections due to concerns about market vulnerability to manipulation, recent indicators suggest a potential shift in regulators’ stance. Speculations hint at a decision expected early in January, likely leading to significant market reactions.

Markus Thielen, founder of digital asset research firm 10x Research, suggests that Bitcoin’s historical performance during U.S. election years, coinciding with the Bitcoin halving cycles in 2012, 2016, and 2020, bodes well for potential gains in 2024.

Looking ahead, the cryptocurrency market remains a focal point for investors and enthusiasts alike. With Bitcoin’s resurgence and the underlying factors shaping its trajectory, 2024 appears poised for continued growth, offering promising opportunities in the evolving landscape of digital assets.

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Mike T, an accomplished crypto journalist, has been captivating audiences with her in-depth analysis and insightful reporting on the ever-evolving blockchain and cryptocurrency landscape. With a keen eye for market trends and a talent for breaking down complex concepts, Mike's work has become essential reading for both crypto enthusiasts and newcomers alike. Appreciate the work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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