Bitcoin’s chances of hitting US$40 000 are top of mind for crypto speculators as they head into the final stretch of a year during which the largest digital asset more than doubled in price.
The token has rebounded about 130% over the past 11 months from 2022’s crypto rout, outstripping investments like stocks or gold. Hopes for US Federal Reserve interest rate cuts next year, and expectations that the US will allow its first spot bitcoin exchange-traded funds, together created a potent elixir.
The rally weathered a US crackdown that put Sam Bankman-Fried behind bars for fraud at FTX and handed top crypto exchange Binance and its founder Changpeng Zhao rap sheets and big fines. For optimists, the drive to curb questionable practices and the recent flurry of ETF applications point to a maturing industry and the potential for wider crypto adoption.
“In order to get to $40 000, we just need that approval for the spot bitcoin ETF,” said Fiona Cincotta, senior financial markets analyst at City Index. The token recently lost some steam, in part as big swings in equities and currencies attracted the attention of investors, she said.
Bloomberg Intelligence expects a batch of US spot bitcoin ETFs to win Securities & Exchange Commission approval by January. A reset in rate bets or unexpected snarls for the ETFs could yet derail bitcoin, but for now sentiment is upbeat.
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MicroStrategy, the largest publicly traded corporate holder of bitcoin, last month bought $593-million more of the token, taking its pile to roughly $6.5-billion. Michael Novogratz, founder of Galaxy Digital Holdings, on Wednesday said bitcoin a year from now may reach its 2021 peak of almost $69 000. — (c) 2023 Bloomberg LP
