Bitcoin Surges to Highest Level in 18 Months Amidst Rally
Bitcoin Hits Yearly High on Speculation Over Fed Interest Rates
Bitcoin has hit its highest price so far this year, amid speculation over potential interest rate changes by the Federal Reserve. The world’s largest cryptocurrency rallied as much as 2.87% to a high of $38,834 on Friday, with other digital assets such as Ether and Solana also seeing increases of more than 2%, according to data tracked by Bloomberg. This surge in Bitcoin’s value marks its highest point since May 5 last year, right before the collapse of the TerraUSD stablecoin ecosystem and the subsequent decline in asset prices.
Investors are eagerly awaiting comments from Federal Reserve Chair Jerome Powell, which could provide guidance on whether the US is nearing a decision to lower interest rates. European stocks also saw gains, and the dollar fell as Powell prepared to speak at Spelman College in Atlanta later on Friday. Meanwhile, US futures edged higher and Treasuries remained steady as investors attempted to gauge whether November’s gains across asset classes could continue.
Markus Thielen, head of research and strategy at Matrixport, noted that the macro environment is expected to continue providing strong support for crypto, and he anticipates a further decline in inflation that could prompt the Federal Reserve to initiate interest rate cuts. Combined with geopolitical factors, Thielen believes this monetary support will help push Bitcoin to new highs in 2024.
Shares of cryptocurrency-linked stocks also rose in US premarket trading, with digital asset exchange Coinbase Global Inc up 3.5% and miner Marathon Digital Holdings up 4%. Bitcoin has now risen more than 133% so far this year, outperforming gains in many other traditional sectors as investors favored exposure to riskier assets. Traders are also optimistic about the potential approval of the US’s first exchange-traded fund tied directly to Bitcoin by the US Securities and Exchange Commission.
The settlement between US authorities and crypto exchange Binance Holdings Ltd. last month has further calmed nerves, according to Deribit chief commercial officer Luuk Strijers. With Bitcoin’s strong performance and the potential for regulatory developments, the cryptocurrency market is poised for further growth in the months ahead.
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