Bitcoin rose today, briefly surpassing $42,000 to reach a 20-month high, in a new surge of momentum fueled by the possibility of US interest rate cuts and traders betting that the US will soon approve exchange-traded spot bitcoin funds.
The world's biggest cryptocurrency rose as high as $42,162 on Monday, its highest since April 2022, seemingly casting off the funk that had settled over crypto markets following the collapse of FTX and other crypto-business failures last year. It was up 6.49% at $41,311.26 as of 1605 GMT.
Bitcoin's gains lifted the shares of cryptocurrency-related companies, as well as exchange-traded funds (ETFs) listed in the United States.
Coinbase jumped 6.5% and Microstrategy gained nearly 6%, while bitcoin miners such as Riot Platforms, Marathon Digital and CleanSpark rose between 8% and 11%. Last week, Microstrategy disclosed it bought an additional $593 million in bitcoin during November.
The ProShares Bitcoin Strategy, which tracks bitcoin futures, rose 7.3%, while the ProShares Short Bitcoin Strategy that allows traders to bet on a fall in bitcoin futures dropped 7.3%.
Bitcoin's "remarkable ascent" can be attributed to a "confluence of factors", that were buoying sentiment, Luuk Strijers, Chief Commercial Officer of crypto derivatives exchange Deribit, wrote in a note on Monday.
Those included widespread optimism that the US securities regulator may soon approve a spot bitcoin ETF, which would throw open the bitcoin market to millions more investors; abating inflation, which would lead central banks to begin easing rate hikes, making riskier assets more attractive; and the steady increase in institutional engagement.
Bitcoin is up by more than 150% so far this year.
