Bitcoin breaks $44K amidst renewed crypto market momentum

By 6 December, Bitcoin (BTC) had surged past the $44,000 mark, reaching levels not seen since April 2022, before the Terra crash dragged the wider crypto market into the doldrums for over a full year. Bitcoin had been flirting with the $40,000 threshold recently and finally broke through on Monday before continuing its streak throughout the week to trade at $44,009 at the time of writing on Wednesday, 6 December. That's an impressive weekly gain of 15% and BTC's highest price in 19 months.

Aside from reaching the highest price of the year so far, Bitcoin has blazed a trail past several milestones this week. The total market capitalisation of cryptocurrencies is now over $1.55 trillion, and Bitcoin is now the world's ninth-largest tradable asset, overtaking Meta's $814 billion capitalisation. Short traders suffered, with over $100 million in liquidations. Long-term holders, meanwhile, will be content with Bitcoin's 163.2% year-to-date gains, which have outperformed both gold and the US dollar.

As usual, BTC's positive momentum has also lifted up the larger crypto market and related sectors, including stocks in crypto holding companies such as Microstrategy. The always second-place Ethereum (ETH) is also riding a bullish wave past $2,200.

The time looks right for crypto's big comeback

Bitcoin's price had dipped below $40,000 in April 2022 but has been on a resurgence in recent months. The most significant contributing factors come from economic developments in the United States, including some comments from US central bankers that interest rates may be cut, as well as optimism regarding the potential approval of a spot bitcoin exchange-traded fund (ETF) in the country.

Federal Reserve Chairman Jerome Powell recently stated that US interest rates were ''well into restrictive territory'' and in danger of slowing down the American economy, leading investors to anticipate a rate cut in the coming year and position themselves accordingly, as lower interest rates tend to favour so-called 'risk assets' such as cryptocurrency and technology stocks. Powell's comments also added to downward pressure on US Treasury yields but boosted both crypto and gold markets, with gold reaching a record high of over $2,100 per ounce and Bitcoin reclaiming a price level not seen in well over a year and a half.

Despite the absence of concrete news on spot Bitcoin ETF approvals, market actors appear to be positioning themselves to profit from their eventual introduction. Traders are engaging in topside option plays, anticipating Bitcoin's rise to $45,000 by the end of March 2024.

There has yet to be official confirmation of a timeline for spot ETF approvals. Still, excitement is mounting around various leaks and nuggets of information that indicate that the process is moving in a positive direction. This week, BlackRock, the world's largest asset manager, disclosed in an SEC filing that it secured $100,000 in seed capital from an undisclosed investor for its spot Bitcoin ETF in October 2023. Other applicants for spot BTC ETFs in the US include ARK Invest, Fidelity, and 21Shares, all big players with a strong interest in increasing customer access to crypto investments via spot ETFs.

Certainly, approval of spot Bitcoin ETFs will contribute significantly to mainstreaming the token and boosting its value even further. However, it's worth keeping in mind that trading digital assets directly through a crypto exchange still puts you ahead of the mainstream and better positioned to act first to capitalise on market movements.

Bitcoin to $50K and more in 2024?

The positive momentum for Bitcoin at the end of 2023 is made even more exciting thanks to its timing just before the pre-halving period that will take place in the first quarter of 2024. In previous halving cycles, Bitcoin's value has tended to appreciate as traders and investors buy the token before the halving on mining rewards makes the asset even more scarce. The overall sentiment suggests a bullish outlook for Bitcoin that is likely to continue as FOMO levels rise as the halving date approaches, currently estimated for mid-April 2024. Predictions are optimistic, with some analysts even pointing to over $100K for Bitcoin next year.

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