Bitcoin reached a 21-month high of over US$47,000
Bitcoin, the world’s largest and most popular cryptocurrency, has staged a remarkable comeback in the past few weeks, surging beyond US$47,000 on Monday, January 9, 2024. This is the highest level since April 2022, when Bitcoin reached its all-time high of nearly US$70,000 before plunging into a prolonged bear market.
What is driving this rally?
The anticipation of the approval of the first Bitcoin spot exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). The SEC has a deadline of January 10, 2024, to make a decision on the applications of several firms that seek to launch a Bitcoin ETF that tracks the price of the underlying asset, rather than its futures contracts. A Bitcoin spot ETF would allow investors to gain exposure to Bitcoin without having to buy or store it directly, potentially boosting the demand and liquidity of the cryptocurrency. According to a report by FX, market participants believe that an approval is imminent and that a Bitcoin spot ETF could start trading as soon as next week.
The increasing adoption of Bitcoin by institutional and retail investors, as well as by governments and corporations. According to data from CoinMarketCap, the market capitalization of Bitcoin has surpassed US$900 billion, making it more valuable than many of the world’s largest companies, such as Facebook, Tesla, and Visa. Moreover, Bitcoin has gained recognition as a legal tender in some countries, such as El Salvador and Panama, and as a reserve asset by some central banks, such as Nigeria and Kazakhstan. Additionally, more companies are accepting Bitcoin as a form of payment or offering Bitcoin-related services, such as PayPal, Square, and Twitter.
The resilience of Bitcoin against various challenges and threats, such as regulatory uncertainty, environmental concerns, cyberattacks, and competition from other cryptocurrencies. Despite facing several hurdles and setbacks, Bitcoin has managed to survive and thrive, proving its durability and reliability as a decentralized and censorship-resistant network. As CryptoNewsZ, Bitcoin has weathered many storms and attempts to change it, with Bitcoin forks now a distant memory. Furthermore, Bitcoin has maintained its dominance in the cryptocurrency market, accounting for more than 40% of the total market share, according to CoinMarketCap.
As of January 9, 2024, the price of Bitcoin was US$47,200, up by 6% in the past week and by 12% in the past month, according to XTB. The next level to watch for Bitcoin bulls is US$50,000, which could be reached if the SEC approves the Bitcoin spot ETF. However, traders should also be aware of the possibility of a correction or a sell-off after the approval, as some investors may take profits or exit the market. Such was the case in 2017, when Bitcoin futures trading was launched and Bitcoin price dropped by more than 50% in the following months.
Bitcoin is undoubtedly one of the most exciting and innovative inventions of the 21st century, and its future looks bright as it continues to attract more attention and adoption. However, it is also one of the most volatile and risky assets, and investors should do their own research and understand the factors that affect its price and performance. Bitcoin is not for the faint-hearted, but for those who believe in its potential and vision.