The rapid rise of Bitcoin at $44,000 comes after gains of about 25% in the last week. The granddaddy of all cryptocurrencies had an even more lucrative 2023, rising 158% from year-ago levels, according to CoinMarketCap data.
Given how long the cryptocurrency world has been in a slump, what is driving Bitcoin’s price rise and similar gains in value among other tokens? And can the good vibes continue into the new year?
“The main impetus for the rise in the price of bitcoin seems to be its impending approval [spot] The bitcoin ETF and the additional capital flows that will follow after the ETF is launched,” said Tegan Kline, CEO of Edge & Node, a company behind a protocol for organizing blockchain data.
Luke Nolan, research associate at CoinShares, believes the “start” of this Bitcoin rally came after the mid-October ruling by the DC Circuit Court of Appeals that closed the June 2022 lawsuit between the SEC and the digital asset manager. Gray scale. The federal court issued a final decision ordering the Securities and Exchange Commission to vacate the rejection of the company’s Bitcoin spot ETF application.
“We’ve seen huge purchases for two reasons as a result of this,” Nolan said. “People facing what they believe will be significant flows arising from potential ETF launches [and] if the SEC approves a bitcoin spot ETF, there is a ‘stamp of approval’ for the asset class from the world’s largest capital market regulator.” If this happens, bitcoin could see more capital inflows, potentially boosting its value.
Bitcoin’s year-end price rally was extremely encouraging as it was accompanied by the highest trading volume seen since November 2022, said Joel Kruger, currency analyst at LMAX Group.
“Of course, one of the main fundamental catalysts comes from the expectation of massive institutional and mainstream adoption in 2024 as channels open to allow easier access to bitcoin exposure,” Kruger said.
