ETF approval boosts sentiment, Bitcoin breaks the $45,000 mark for the first time in 21 months

Zhitong App has learned that the price of Bitcoin has surpassed the $45,000 mark for the first time in nearly two years, mainly due to the increasing expectation of the approval of Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC). January 10, 2024, is the final deadline for the SEC to make a formal response regarding the approval of Bitcoin spot ETFs.

Data shows that the cryptocurrency rose by 4% on the first working day of 2024, reaching its highest level since April 6, 2022. As of the time of writing, the trading price of Bitcoin is $45,510. Other cryptocurrencies have also seen an increase, with the second-largest cryptocurrency, Ethereum, rising by as much as 2.6%.

As the final deadline for the SEC's decision on whether to approve Bitcoin spot ETFs approaches on January 10, Bitcoin has risen by over 15% since early December.

Hayden Hughes, co-founder of social trading platform Alpha Impact, said that some traders in the United States and Europe are worried about missing investment opportunities before the upcoming approval. "Retail investors have already started buying in large quantities on January 1, which is the first thing they do in the morning of the new year," Hughes said.

Some traders who are optimistic about the future of cryptocurrencies expect Bitcoin to reach $50,000 soon, thanks to the optimistic sentiment triggered by the potential approval of ETFs.

In addition, the price recovery wave of Bitcoin in the past six months has been driven by broader risk sentiment sparked by expectations of interest rate cuts in the United States and Europe. This rebound has partially offset the severe damage caused by the cryptocurrency crash in 2022. However, the price of Bitcoin is still below the historical record of nearly $69,000 reached during the COVID-19 pandemic in 2021.

But in 2024, it is highly likely that this historical record of $69,000 will be broken. Some industry executives insist that a new bull market for Bitcoin has already begun, based on two major events: the Bitcoin halving and the highly probable approval of Bitcoin spot ETFs in the United States.

James Butterfill, Research Director at CoinShares, said that with the possible approval of Bitcoin ETFs by the US government, the outlook for cryptocurrency assets will undergo "significant changes" in 2024. "This long-awaited development will expand the investor base for cryptocurrency assets and integrate them more closely with traditional financial markets," Butterfill said in an interview with the media. "Predictive data suggests that a 20% increase in investments (approximately $3 billion) from the current assets managed by asset management firms could potentially push the price of Bitcoin to $80,000." Meanwhile, Butterfill added that the expectation of global central bank interest rate cuts could also "play a decisive role" in driving up the price of Bitcoin.

In November 2023, Standard Chartered Bank released a report stating that the $100,000 milestone will be strongly driven by the approval of numerous ETFs. The bank also stated that the halving event will support the trend of Bitcoin prices. As early as April, Standard Chartered Bank released a report predicting that Bitcoin is expected to reach $100,000 by the end of 2024.