After closing up 8.8% in November, Bitcoin has already posted a 3% gain in the first days of December. Besides the hope that an ETF could be approved in January, another factor contributing to this increase is the weakening of the dollar.
In short, the market expects the Fed to cut rates in the coming months and investors are already anticipating this move. For example, the dollar has been trading lower against the euro, the Japanese yen and other fiat currencies for a few days.
The US stock markets are also performing higher against the dollar. Both the S&P500 index and the Dow Jones are at their highest annual levels. Another major asset is gold, which is trading above $2,070; this is the highest price in history.
Bitcoin reaches $39,000
Bitcoin started trading at $16,500 in 2023, under heavy pressure from the bankruptcy of FTX and other industry giants, as well as the Fed’s harsh monetary police. Many believed this would be a tough year for BTC, yet the largest cryptocurrency market rose 135%.
This Friday (1st), Bitcoin traded at US$39,000, the highest price since May 2022. At the time of writing, the price is around US$38,800, very close to that peak.
In addition to the market, including the traditional one, betting on the fall of the dollar, investors also remain alert to the possible approval of the first Bitcoin ETF in the US. This week, the SEC met with a number of executives, demonstrating progress in the talks.
According to Eric Balchunas and James Seyffart, ETF analysts at Bloomberg, there is still a good chance that ETFs will be approved in January next year.
“People ask me if we have changed [nossas] estimates. No, we are still maintaining a 90% probability of approval by January 10, the same thing we have been talking about for months.”
People ask me if we have changed the odds. No, we’re still sticking with a 90% approval probability on January 10th (aka this cycle), the same odds we’ve had for months (before it was cool/safe). What we’re looking at now: more amended/final submissions coming in and creating clarity on in-kind versus cash https://t.co/uiWgfxOfzz
— Eric Balchunas (@EricBalchunas) November 29, 2023
With the possible approval of its first ETF, a drop in US interest rates and the halving, Bitcoin has everything it needs to perform well in 2024. In addition to the likely increase in demand, there would also be a decrease in supply.
Altcoins follow the rise of Bitcoin
Strongly influenced by Bitcoin, several alternative cryptocurrencies are also emerging. To culminate, the price of Terra Classic (LUNC) has doubled in the past seven days following the listing of its stablecoin on Binance and an airdrop promise from its developers.
Ethereum, the second largest on the market, is operating above $2,000 but is still facing strong resistance in the region. Whatever the case, some investors are confident of a big rally. As with Bitcoin, BlackRock has also placed an order for an Ethereum ETF in cash.
“The Ethereum chart remains one of the most bullish I have ever seen”said Raoul Pal, founder of Real Vision.
The zoomed out map of #Ethereum remains one of the most bullish I’ve ever seen…
Here are the top 5 charts @BittelJulien and I’m looking at Global Macro Investor this week.
To enjoy.
Read it here: https://t.co/XcATUcnyQW pic.twitter.com/vnHBXX1K0d
— Raoul Pal (@RaoulGMI) November 26, 2023
Finally, the market is enthusiastic, but it is necessary to be careful and act wisely. After all, ETFs could be rejected and the Fed could continue tight monetary policy into 2024, causing markets to collapse.
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Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
