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Bitcoin rises above $42,000 for first time since April 2022

Published Dec 03, 2023 06:10PM ET Updated Dec 04, 2023 03:35PM ET
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© Reuters. Bitcoin coins are seen at a stand during the Bitcoin Conference 2023, in Miami Beach, Florida, U.S., May 19, 2023. REUTERS/Marco Bello/File photo
 
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By Tom Wilson, Tom Westbrook and Chibuike Oguh

LONDON/SINGAPORE/NEW YORK (Reuters) -Bitcoin rose on Monday, briefly surpassing $42,000 to reach a 20-month high, in a new surge of momentum fueled by U.S. interest rate cut expectations and traders betting that American regulators will soon approve exchange-traded spot bitcoin funds.

The world's biggest cryptocurrency rose to $42,162, its highest since April 2022, seemingly casting off the gloom that had settled over crypto markets following the collapse of FTX and other crypto-business failures last year. It was up 8.27% at $42,005 as of 20:00 GMT.

Bitcoin's gains lifted the shares of cryptocurrency-related companies, as well as exchange-traded funds (ETFs) listed in the United States.

Coinbase (NASDAQ:COIN) jumped 7% and Microstrategy (NASDAQ:MSTR) gained 6.3%, while bitcoin miners such as Riot Platforms (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA) and CleanSpark (NASDAQ:CLSK) rose between 7% and 13%. Last week, Microstrategy disclosed it bought an additional $593 million in bitcoin during November.

The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose 7.5%, while the ProShares Short Bitcoin Strategy ETF that allows traders to bet on a fall in bitcoin futures dropped 7.5%.

Bitcoin's "remarkable ascent" can be attributed to a "confluence of factors" that were buoying sentiment, Luuk Strijers, chief commercial officer of crypto derivatives exchange Deribit, wrote in a note on Monday.

He cited widespread optimism that the U.S. securities regulator may soon approve a spot bitcoin ETF, which would throw open the bitcoin market to millions more investors. Abating inflation would lead central banks to begin easing rate hikes, making riskier assets more attractive, he said, and noted a steady increase in institutional engagement.

Bitcoin is up by more than 150% so far this year.

Riskier investments and other interest-rate sensitive assets, such as gold, have also rallied hard over the last few weeks as markets wager that the U.S. Federal Reserve has finished hiking rates and will start cutting early in 2024.

Reports in October that the U.S. Securities and Exchange Commission (SEC) would not appeal a court ruling that the agency had been wrong to reject its spot bitcoin ETF application have also driven bets that an eventual approval is near.

SEC Chair Gary Gensler said in October the agency's commissioners would potentially consider as many as 10 bitcoin ETF filings, but could not provide guidance on timing.

A spot bitcoin ETF could allow previously wary investors access to crypto via the tightly regulated stock market. Demand is expected to be as much as $3 billion in the first few days of trading, and pull in billions more thereafter.

Investors are confident the SEC could approve multiple spot bitcoin ETFs as early as January, based on key public SEC filing and comment deadlines, Matteo Greco, research analyst at digital asset investment firm Fineqia International, wrote in a note.

"An approval is expected to bring short-term capital influx from the traditional finance investors."

Investors have also welcomed the settlement of a years-long U.S. criminal probe into Binance, the world's largest crypto exchange and a key cog in the worldwide crypto market.

The deal, in which Binance founder Changpeng Zhao stepped down after pleading guilty to breaking U.S. anti-money laundering laws, allows the company to continue operating.

Ether, the coin linked to the Ethereum blockchain network, rose more than 6% on Monday, hitting $2,274.88.

Both bitcoin and ether remain far below their 2021 record highs of $69,000 and $4,868, respectively.

Bitcoin rises above $42,000 for first time since April 2022
 

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Comments (5)
Merica Moment
Merica Moment Dec 03, 2023 7:19PM ET
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Imagine buying into a digital ponzi scheme of nothing.
Mark Gess
Mark Gess Dec 03, 2023 7:19PM ET
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As opposed to buying into a devalued fiat currency like the dollar? I like my chances with Bitcoin.
you what
you what Dec 03, 2023 7:19PM ET
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Please explain how BTC can have 'quantative easing" like USD,GBP,EURO or YEN?
Tape Worm
Tape Worm Dec 03, 2023 7:19PM ET
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yes it showed that your USD is more trash than this ponzi. so u call btc ponzi, what is usd? super ponzi by central bank???
Khalifa Alghaueta
Khalifa Alghaueta Dec 03, 2023 7:07PM ET
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Haw AR you
Stan Smith
Stan Smith Dec 03, 2023 6:31PM ET
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Gold has hit all time highs.. its all hush hush
Ashan Nethmina
Ashan Nethmina Dec 03, 2023 6:27PM ET
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The growth of this is indeed the reason for the increase in people's interest in Crypto currencies
Taylor Huddlestun
Taylor Huddlestun Dec 03, 2023 6:19PM ET
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People are still using real money to buy virtual money to spend that virtual money on real products?
Brad Albright
Brad Albright Dec 03, 2023 6:19PM ET
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The real products one can buy with virtual currencies is limited.
Mark Gess
Mark Gess Dec 03, 2023 6:19PM ET
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Brad Albright   $100 worth of Bitcoin in 2013 is worth $4 MILLION today. I'd say there's a lot you could buy with that.
you what
you what Dec 03, 2023 6:19PM ET
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didnt some dude buy a bunch of pizza worth around $300m in todays valuation of BTC ;)
 
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