Key Insights
- Bitcoin suddenly spikes to $45,500, hitting 21-month high
- Continues 2023 crypto rally amid optimism around easier mainstream access
- Investors excited by prospects of a US bitcoin ETF and upcoming supply “halving” event
HONG KONG – Bitcoin powered to new 21-month highs above $45,500 overnight, extending its 2023 rally driven by expectations of easier access for mainstream investors and constrained new supplies ahead.
The world’s largest cryptocurrency hit $45,519.52 early Tuesday UTC, its highest since April 2022, CoinMarketCap data showed. Buoyant sentiment spilled over, with smaller token Ether up 6% while Solana jumped 12%.
Bitcoin was last around $45,600, up nearly 7% from its Monday 1700 GMT level. It has gained over 150% since January 2023 as speculative bets grow that industry maturation and fresh regulatory oversight will entice large capital inflows this year.
An increasing focus has centered on the U.S. approving a spot bitcoin exchange-traded fund (ETF) in 2024. Such a product would open the doors for money managers unable to directly purchase cryptoassets.
Momentum signals remain decidedly bullish and consistent with continued upward price action,” said Stephen Ethan, technical analyst at MarketsXplora.
Positive sentiment has also grown ahead of 2024’s halving – an event occurring every four years which cuts the rewards given to miners of new bitcoin by 50%. With less tokens entering circulation, bitcoin’s economics support higher prices over the longer term.
Read also! Which Cryptos Will Boom If Bitcoin ETF is Approved in 2024?
Cryptocurrency investors have also bet flatter supplies this year from miners will aid prices after two major crises last year, including the spectacular collapse of exchange FTX. Tighter credit policies at bitcoin-backed lenders have ensued, with many miners forced to slash inventories.
Yet some analysts urged caution over rapid short-term gains. Crypto prices remain highly volatile and retail traders risk painful losses attempting to time temporary peaks.