Bitcoin rises above $42,000 for first time since April 2022

Bitcoin has surged to a 20-month high, briefly surpassing $42,000 on Monday. The cryptocurrency’s momentum has been fueled by expectations of a U.S. interest rate cut and optimism that American regulators will approve exchange-traded spot Bitcoin funds. The rise in Bitcoin’s price has also lifted the shares of cryptocurrency-related companies and ETFs in the United States.

In a recent interview on Making Money, Chamber of Digital Commerce CEO and founder Perianne Boring discussed the factors contributing to Bitcoin’s price surge.

The impressive ascent of Bitcoin can be attributed to a combination of factors buoying investor sentiment. These include optimism regarding the potential approval of a spot Bitcoin ETF by the U.S. securities regulator, as well as the anticipation of a decrease in inflation leading to rate hikes by central banks, making riskier assets more attractive. Additionally, reports indicate a steady increase in institutional engagement with Bitcoin, driving further confidence in the cryptocurrency.

Furthermore, the settlement of a long-standing U.S. criminal probe into Binance, the world’s largest crypto exchange, has been welcomed by investors. The agreement, which involved Binance founder Changpeng Zhao pleading guilty to violating U.S. anti-money laundering laws, allows the company to continue operating, reassuring market participants.

The rise in Bitcoin’s price has also had a positive impact on the shares of cryptocurrency-related companies and ETFs listed in the United States. Coinbase saw a 7% increase, while Microstrategy gained 6.3%. Bitcoin miners such as Riot Platforms, Marathon Digital, and CleanSpark experienced gains ranging from 7% to 13%.

Another factor contributing to the surge in Bitcoin’s price is the speculation surrounding the potential approval of multiple spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). Investors are optimistic that an approval could bring a significant influx of capital from traditional finance investors.

Amidst the rise in Bitcoin’s price, Ether, the coin linked to the Ethereum blockchain network, also experienced significant gains, rising more than 6% to reach $2,274.88.

It’s important to note that while the recent surge is remarkable, both Bitcoin and Ether remain below their 2021 record highs of $69,000 and $4,868, respectively.

The year 2022 has seen impressive growth in the cryptocurrency market, with Bitcoin up by more than 150% so far. Additionally, investors are closely monitoring the historic context of this surge, including developments in regulations and institutional engagement, which indicate a growing recognition of Bitcoin as a dominant global macro asset.

Overall, the current surge in Bitcoin’s price reflects a confluence of factors driving optimism and investment in the cryptocurrency market, positioning it as a topic of significant interest for both investors and market observers.

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