Bitcoin hits $45,000 for first time in more than 20 months

Bitcoin rose above $45,000 yesterday for the first time since April 2022 as the world’s biggest and bestknown cryptocurrency started 2024 with a bang, buoyed by optimism around possible approval of exchange-traded spot bitcoin funds.

Bitcoin touched a 21-month peak of $45,488, having gained 154 per cent last year in the strongest performance since 2020. It was up 3.5 per cent at $45,727 as of yesterday afternoon UAE time, but remains far off the record $69,000-level it reached in November 2021.

Ether, the coin linked to the ethereum blockchain network, was 2.6 per cent higher at $2,414 yesterday.

Investor focus has been squarely on whether the US securities regulator will soon approve a spot Bitcoin ETF, which would open the Bitcoin market to millions more investors.

The US Securities and Exchange Commission has rejected applications to launch spot Bitcoin ETFs in recent years, on the grounds that the cryptocurrency market is vulnerable to manipulation.

In recent months, however, there have been increasing signs that regulators are prepared to sign off on at least some of the 13 proposed spot Bitcoin ETFs, with expectations that the decision is likely to come this month.

The reaction to a possible rejection is likely to cause an immediate tumble, said Chris Weston, head of research at Pepperstone. “However, should we see the green light the obvious question is whether we get a buy the rumour, sell-on-fact scenario playout or whether it promotes another leg higher.”

Rising speculation that major central banks will cut interest rates this year has also been a boon for cryptocurrencies.