Investors in Bitcoin have had a good past 24 hours. In that timeframe, Bitcoin’s price has risen almost 6%, sending the digital coin to a price of just above $41,840 as of the time of this writing. This marks the first time that Bitcoin has broken the $40,000 barrier since May 2022.
In April 2022, the TerraUSD stablecoin collapsed, and with it, the value of various cryptocurrencies crashed—including Bitcoin’s. By November 2022, Bitcoin had sunk to below $16,000. But since then, the digital token has slowly clawed its way back up.
Betting on rate cuts and ETFs
So what has caused Bitcoin to pass the psychologically important $40,000 mark again? Bloomberg says there are two likely reasons. First, is the expected upcoming interest rate cuts from the Federal Reserve. These expected cuts could help fuel market rallies across the globe, including cryptocurrency markets.
But perhaps a bigger impact on Bitcoin’s rise is increasing confidence within the sector that additional cryptocurrency exchange-traded funds (ETFs) may be approved by the Securities and Exchange Commission (SEC) as soon as next month. Investment giant BlackRock is expected to be one of the first to have its crypto ETF approved next year. If the SEC does approve the ETF, it will give another stamp of legitimacy to cryptocurrency investments.
Since the crypto market’s collapse in May 2022, hundreds of billions have been wiped off the market caps of some coins. However, while 2022 was a rough year for Bitcoin, 2023 hasn’t been so bad. The price of Bitcoin has risen over 150% this year.
While it’s impossible to know where Bitcoin will go from here, there is another event coming next year that could bolster the coin’s price. In May 2024, Bitcoin is expected to undergo its fourth halving—an event that takes place every four years and reduces the number of Bitcoins miners receive by half. Bitcoin hit record prices before each of the three prior halvings in 2012, 2016, and 2020.
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