On the 4th, the price of the cryptocurrency Bitcoin (BTC) rose by about 5% from the previous day, surpassing the milestone of $40,000 (about 5.86 million yen). This is the first time in about a year and a half since May last year that Bitcoin has reached $40,000.
In tandem with this, major altcoins have also risen across the board. Ethereum (ETH) has surpassed $2,250 (about 330,000 yen) at the time of writing. This price, like Bitcoin, is at a level not seen since May last year.
The score of the Fear & Greed Index, which measures sentiment in Bitcoin, has reached 74, which is seen in bull markets. This is the first time the score has risen to 74 since November 2021, when Bitcoin recorded its all-time high. Against this backdrop, market participants are taking a bullish stance, suggesting that they are optimistic about Bitcoin's market trends.
▶Bitcoin Fear Index (quoted from Fear & Greed Index)
One of the reasons for the significant price increase in Bitcoin is the trend surrounding the approval of a Bitcoin spot ETF.
According to Bloomberg analyst James Seyffart, the SEC (US Securities and Exchange Commission) is likely to approve a Bitcoin spot ETF between January 5th and 10th next year.
In fact, the SEC has recently been in discussions with companies such as BlackRock and Grayscale that are applying for Bitcoin spot ETFs. These movements can also be said to be having a positive impact on the cryptocurrency market.
In addition, the fact that FRB Chairman Powell stated that the policy interest rate is "quite restrained" has strengthened expectations of an early interest rate cut, which has had a significant impact on the Bitcoin price.
Chairman Powell did not rule out the possibility of an interest rate hike, but mentioned that he would "proceed cautiously" in the future. This has reduced the likelihood of interest rates being raised in the near future, and US long-term interest rates have fallen. We have seen an inflow of funds into risk assets such as Bitcoin and high-tech stocks.
On the other hand, if the fighting between Israel and the Islamic organization Hamas, which reunited on the 1st, intensifies further, risk assets may fluctuate again. Bitcoin and other cryptocurrencies are no exception and may move significantly in tandem with the global economy, so caution is required.
Reference:Mr. Seifert X
Image: Shutterstock
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