Roller Coaster Bitcoin Is Clocking Big Gains

Cryptocurrency is above $40K again, up 150% this year
By Newser Editors and Wire Services
Posted Dec 4, 2023 2:45 PM CST
Roller Coaster Bitcoin Is Clocking Big Gains
File photo of an advertisement for bitcoin on a building in Hong Kong.   (AP Photo/Kin Cheung, File)

Bitcoin is once again having a moment. On Monday, the world's largest cryptocurrency soared past $41,000 for the first time in over a year and a half—marking a 150% rise so far this year, per the AP. Volatile bitcoin rocketed from just over $5,000 at the start of the pandemic to nearly $68,000 in November 2021, according to FactSet, a period marked by a surge in demand for technology products. Prices fell back to earth during an aggressive series of Federal Reserve rate hikes aimed at taming inflation and then the collapse of FTX, one of the biggest companies in crypto.

When 2023 began, a single bitcoin could be had for less than $17,000 after losing more than 75% of its value. Investors, however, began returning in large numbers as inflation started to cool. And the collapse of prominent tech-focused banks actually led more investors to turn to crypto as they bailed out of positions in Silicon Valley start-ups and other risky bets. But fueling this latest rally are prospects for the possible approval of spot bitcoin exchange traded funds—a pooled investment security that can be bought and sold like stocks.

Industry advocates say this new way of investing in bitcoin at spot prices, instead of futures, could make it easier for anyone to enter the cryptoverse while lowering some of the well-documented risks associated with investing in cryptocurrencies. Regulators have previously rejected bitcoin spot ETF applications, but recent wins for some crypto fund managers have improved odds for a first approval, perhaps as soon as next month. "The longer-term catalyst (for bitcoin) is a lot of optimism related to the potential approval of a spot ETF," Kaiko research analyst Riyad Carey said Monday. He noted, however, that a regulatory green light doesn't promise continued gains.

(More bitcoin stories.)

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