(Seoul) Bitcoin soared Monday to its highest price since April 2022 at over $42,000, driven by hopes that the United States will soon approve a new mainstream offering that could further normalize the asset .
Around 9 a.m. ET, it was still trading sharply higher, gaining 7.2% to $41,614, shortly after surpassing $42,144, its highest price since April of last year.
“Optimism continues to grow around anticipated approvals of bitcoin ETFs by the SEC,” the Securities and Exchange Commission, says James Harte, an analyst at Tickmill.
A “Bitcoin ETF spot,” an investment product that would directly track the price of cryptocurrency, would allow a larger portion of the general public to invest in cryptocurrency without having to purchase it directly.
The SEC is reviewing a request to create a bitcoin ETF from asset manager Grayscale, as well as requests from other groups, including BlackRock, the world’s largest asset manager, and Ark Invest.
Its first decision should be on Ark Invest’s request, no later than January 10.
“Although the SEC has delayed a decision on the current applications until next month, investors are generally optimistic that these approvals will be obtained, which would pave the way for a new wave of demand” for bitcoin, continues Mr. Harte.
Bitcoin has skyrocketed this year, increasing in value by more than 150%.
Recently, it has also been boosted by the hope that the American central bank (Fed) has completed its monetary tightening program and that it will be able to lower its interest rates next year.
“The dollar has weakened significantly in recent months, and as expectations for rate cuts increase, it is likely to continue to weaken,” Harte points out. And a “weaker dollar should help support bitcoin through increased risk appetite.”
The cryptocurrency remains well below its record level of nearly $69,000 reached in 2021, but this prospect breathes a breath of hope into a sector marked by its share of bankruptcies and scandals.
FTX, the world’s second-largest cryptocurrency exchange, went bankrupt last year and its boss Sam Bankman-Fried (SBF) faces up to 110 years in prison for “one of the biggest financial frauds of American history” in the words of the Manhattan federal prosecutor.
At the beginning of November, SBF was found guilty of having used, without their knowledge, funds deposited by clients of its exchange platform to fuel risky transactions and investments of its investment company, Alameda Research, including loans to FTX have reached up to around $14 billion.
At the end of November, Changpeng Zhao, boss of Binance, the largest cryptocurrency exchange platform in the world, announced his resignation after agreeing to plead guilty to violating American anti-money laundering laws.
