Bitcoin surges beyond $45,000, setting a new two-year high

In a remarkable milestone, Bitcoin has surged past the $45,000 mark, marking its highest value in nearly two years. This surge is fueled by mounting anticipation surrounding the potential approval of an exchange-traded fund (ETF) directly linked to the largest cryptocurrency.

The cryptocurrency experienced a notable spike, reaching up to 4.3%, attaining its highest value since 6 April 2022, and currently trading at $45,355. Ether, the second-largest cryptocurrency, also saw gains, rising by as much as 2.6%.

Bitcoin’s value has soared by over 20% since the beginning of December 2023, driven by the approaching 10 January 2024, deadline for the US Securities and Exchange Commission (SEC) to greenlight a spot ETF for Bitcoin.

Traders in the U.S. and Europe are grappling with a fear of missing out as the critical approval date approaches. Hayden Hughes, co-founder of social-trading platform Alpha Impact, noted that some investors have already begun buying on 1 January 2024, the first thing on New Year’s morning.

Options traders have been optimistic, with bets on Bitcoin reaching $50,000 riding on the positive sentiment around the potential spot for ETF approval.

Despite this surge, analysts like Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, believe a major correction is unlikely, given the prevailing bullish sentiment and the impending halving. McCalman emphasized that traders would need nerves of steel to short BTC.

The upcoming halving, scheduled for April 2024 and occurring approximately every four years, is contributing to the positive outlook. Bitcoin has historically achieved record highs after each of the last three halvings.

Bitcoin’s remarkable rebound of nearly 160% in 2023 has partially mitigated the impact of the precipitous 2022 crash. While the cryptocurrency outperformed global stocks and gold during this period, it still lags behind its 2021 pandemic-era peak of almost $69,000.