Bitcoin reached a milestone, surpassing the $45,000 mark for the first time in almost two years, driven by heightened expectations of the approval of an exchange-traded fund (ETF) directly investing in the leading cryptocurrency. The digital asset experienced a surge of up to 4.3%, reaching its highest level since April 6, 2022, and was trading at $45,355 as of 12:25 p.m. Singapore time. Other cryptocurrencies, including Ether, the second-largest by market capitalization, also saw gains, rising by as much as 2.6%.
Bitcoin has witnessed a remarkable uptrend, soaring over 20% since the beginning of December, as the January 10 deadline for the US Securities and Exchange Commission (SEC) to potentially approve a spot ETF for Bitcoin approaches.
Traders in the US and Europe are displaying a fear of missing out (FOMO) ahead of the anticipated approval. Hayden Hughes, co-founder of the social-trading platform Alpha Impact, noted that some investors have started “buying on January 1, first thing New Year’s morning.”
Options traders have been actively speculating on Bitcoin hitting the $50,000 mark, fueled by optimism surrounding the potential approval of the spot ETF.
Despite the excitement, industry experts believe a significant correction is unlikely, given the prevailing bullish sentiment and the upcoming Bitcoin halving in April. Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, mentioned that traders would need “nerves of steel” to short BTC in the current market conditions.
The Bitcoin halving, which occurs approximately every four years, is scheduled for April. This event involves reducing the quantity of Bitcoin miners receive per block reward by half. Historically, Bitcoin has set records after each of the last three halvings.
Bitcoin’s impressive rebound of nearly 160% last year helped recover some of the losses incurred during the sharp crash in 2022 that had a widespread impact on the cryptocurrency industry. Although Bitcoin outperformed global stocks and gold during this period, it is still below its pandemic-era record of almost $69,000 set in 2021.
