Bitcoin hits US$40,000 level for first time since May 2022

BANGKOK – Bitcoin hit US$40,000 for the first time since May 2022 as the largest digital asset extended this year’s rebound on expectations of interest-rate reductions and greater demand from exchange-traded funds.

The token traded at US$40,099 as of 6:35am on Dec 4 in Singapore, taking its 2023 jump to 142 per cent.

Bitcoin was last at US$40,000 before the TerraUSD stablecoin collapse that contributed to a rout in digital assets and a daisy chain of collapses in the crypto sector.

Investors are increasingly convinced the United States Federal Reserve is done with rate hikes as inflation cools, turning the focus to the likely extent of cuts next year. The changed backdrop has fueled a rally across global markets.

The digital-asset industry is also awaiting the outcome of applications from the likes of BlackRock to launch the first US spot Bitcoin ETFs. Bloomberg Intelligence expects a batch of such funds to win Securities & Exchange Commission (SEC) approval by January.

“Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024,” Tony Sycamore, a market analyst at IG Australia, wrote in a note. Technical chart patterns point to US$42,330 as the next level to watch for, he added.

Bitcoin’s rebound from last year’s crypto crash has weathered a US crackdown that put Sam Bankman-Fried behind bars for fraud at FTX and handed top crypto exchange Binance and its founder Zhao Changpeng rap sheets and big fines. For optimists, the drive to curb questionable practices and the flurry of ETF applications point to a maturing industry and the potential for wider crypto adoption.

Even so, Bitcoin as well as smaller tokens such as Ether and BNB remain some way below the records they hit during the pandemic-era bull run in crypto. The largest token peaked at almost US$69,000 in November 2021. BLOOMBERG

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