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Friday February 23, 2024

Bitcoin surpasses $41,000 mark - a record jump since April 2022

Bitcoin began at a little over $5,000 at the start of the epidemic and reached a peak of around $68,000 in November 2021

By Web Desk
December 05, 2023
A visual representation of the digital cryptocurrency Bitcoin. — AFP
A visual representation of the digital cryptocurrency Bitcoin. — AFP

Financial markets saw a crazy ride on Monday. Gold made a dramatic swing after hitting a record high above $2,100 per ounce, while stocks and bonds fell. 

In contrast, Bitcoin held its ground in the realm of digital assets, surpassing $41,000 for the first time in more than a year and experiencing a startling 150% increase in value only this year.

Considering its volatility, the rise of Bitcoin has been astounding. It began at a little over $5,000 at the start of the epidemic and reached a peak of around $68,000 in November 2021. Its value fell following a string of rate hikes by the Federal Reserve and the collapse of FTX. 

Monday witnessed a wild ride across financial markets. While stocks and bonds stumbled, gold took a sharp turn after reaching a record high above $2,100 per ounce. However, in the digital-assets world, Bitcoin stood strong, breaking through the $41,000 barrier for the first time in over a year and marking a staggering 150% surge in value this year alone.

The rise of Bitcoin has been remarkable, considering its volatility. From just over $5,000 during the pandemic's onset, it peaked at nearly $68,000 in November 2021. After a series of Federal Reserve rate hikes and FTX’s collapse, its value plummeted. However, anticipations around the US Securities and Exchange Commission's (SEC) approval of exchange-traded funds (ETFs) directly buying the cryptocurrency have led to a recent surge in Bitcoin prices. According to Moody's Analytics' Yiannis Giokas, the spike is related to the large number of applications for spot Bitcoin exchange-traded funds (ETFs) that are expected to receive SEC approval in the near future.

The price of bitcoin increased significantly; it peaked at $42,144 during the day and settled at $41,803 around 4 p.m. in New York. Its biggest yearly rise since 2020 is represented by this recovery. Notable increases were also seen in other cryptocurrencies, such as Ether and Dogecoin, with Bitcoin Cash rising by 9%.

The industry is eagerly awaiting decisions from BlackRock Inc. and others regarding the launch of the first US spot Bitcoin ETFs.

Despite previous enforcement actions and regulatory crackdowns against cryptocurrency exchanges and figures, analysts view these actions as necessary steps towards a more developed and matured crypto market.

But there are dangers. The rise in Bitcoin might be derailed by changes in interest rate forecasts or problems with the ETFs. Technical indications also point to the possibility that the currency's gain is overdone.