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Bitcoin Rises Above $45,000, A First Since April 2022

Bitcoin Rises Above $45,000, A First Since April 2022
With hope surrounding the potential approval of exchange-traded spot bitcoin funds, the world's largest cryptocurrency, bitcoin, kicked out the New Year with a bang on Tuesday, surging above $45,000 for the first time since April 2022.
With its highest year performance since 2020, Bitcoin gained 156% last year and reached a 21-month high of $45,532. It is still far from the record high of $69,000 it reached in November 2021, even if it was up 3.5% at $45,727 as of late.
The token associated with the Ethereum blockchain, ether, increased 2.6% to $2,414 on Tuesday after rising 91% in 2023.
Following significant declines in the last trading days of 2022, cryptocurrency stocks—which closely follow the price of bitcoin—soared in U.S. premarket trading, with Riot Platforms, Marathon Digital, and CleanSpark gaining between 11.3% and 14.8%.
Software company and bitcoin investor MicroStrategy gained 9.4%, while the US cryptocurrency exchange Coinbase increased 6.3%.
The main concern among investors has been whether the U.S. securities regulator will soon authorise a spot bitcoin ETF, which would attract billions of dollars in investments and open up the market to millions more people.
In recent years, the U.S. Securities and Exchange Commission has denied many requests to introduce spot bitcoin exchange-traded funds (ETFs), citing concerns about market manipulation.
However, there have been more indications in recent months that authorities are ready to approve at least some of the 13 planned spot bitcoin exchange-traded funds (ETFs). It is anticipated that a decision will be made in early January.
According to Chris Weston, head of research at Pepperstone, there would be an obvious and quick fall in response to a potential rejection.
"However, should we see the green light the obvious question is whether we get a buy-the-rumour, sell-on-fact scenario playout or whether it promotes another leg higher," he added in a note.
Growing expectations that major central banks will lower interest rates this year have also helped cryptocurrencies recover, dispelling some of the pessimism that had enveloped the market after FTX's collapse and other 2022 crypto-business flops.
According to Markus Thielen, founder of digital asset research firm 10x Research, bitcoin tends to do well during U.S. election years, coinciding with cycles of the cryptocurrency's halving in 2012, 2016, and 2020, therefore crypto markets could continue their gains in 2024.

Christopher J. Mitchell

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