Bitcoin price surpasses $38,000.

The world's largest cryptocurrency surged to over $38,000 in a matter of hours, its highest level since May 2022.

From around $36,000 at the beginning of the month, Bitcoin quickly reached $38,000 yesterday afternoon. At one point, the cryptocurrency hit $38,416. After holding that price for a few hours, Bitcoin retreated to around $37,800. This level remains Bitcoin's highest price since May 2022, more than a year and a half ago.

Ethereum – the second-largest cryptocurrency – also rose more than 3% and is currently trading near $2,090 per unit. Cryptocurrency-related stocks also gained on the day, with Coinbase shares up 6%, Stronghold Digital Mining adding 6.4%, and Marathon Digital Holdings up 4%.

The price surge occurred as investors awaited approval from the U.S. Securities and Exchange Commission (SEC) for a spot Bitcoin exchange-traded fund (ETF). Analyst Laurent Kssis stated: "With the BTC ETF nearing approval, possibly on January 11th next year, it will create a new wave of volatility in the market."

ETFs allow investors to easily trade without physically holding the funds, at low cost, thereby attracting more capital from institutional investors. This group has previously been prohibited from trading on cryptocurrency exchanges due to legal barriers. Expert Laurent Kssis also predicts that Bitcoin could rise to $40,000 by the end of the week.

The launch of Bitcoin ETFs has been a driving force in the cryptocurrency market for over a month. Not only has the price increased, but it has also attracted significant capital inflows. According to investment advisory firm ByteTree, the number of Bitcoin held by investment funds this week has risen to 863,434 units, surpassing the previous record high set in April 2022. Over the past month, these funds have added approximately 22,100 Bitcoin.

Broader crypto funds have also seen an increase in new capital inflows in recent weeks. Digital asset management firm CoinShares recorded a net inflow of $767 million over the past six weeks, the most since the 2021 bull market. Broader funds are funds that track and seek returns with hundreds, sometimes thousands, of units.

Major investment banks are also showing increased interest in this sector. Swiss bank UBS is reportedly in talks to launch three large cryptocurrency ETFs: Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETF, all authorized by the Hong Kong Securities and Futures Commission. Previously, HSBC also announced plans to begin offering digital asset custody services to institutional clients.

Xiao Gu (according to CoinDesk )

Source link