Bitcoin's price soared above $41,000 on Monday, reaching levels unseen since the collapse of the TerraUSD stablecoin in May 2022. This surge is attributed to Bitcoin's strength in anticipation of the potential approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) and the upcoming Bitcoin halving event. Coinglass, a crypto derivative data analysis platform, reported over $109 million in liquidated Bitcoin short positions in the past 24 hours.
Gold, too, reached an all-time high surpassing $2,115 recently. Bitcoin, often referred to as "digital gold," has been advocated as a long-term store of value, and the positive correlation between the two assets is seen as a sign of Bitcoin's increasing adoption toward this goal.
In an announcement on X (formerly Twitter), El Salvador's President Nayib Bukele declared that the country's Bitcoin holdings are now in the black in dollar terms. Bukele, who initiated Bitcoin purchases near the previous bull market peak in 2021, emphasized that the country has no intention of selling, aligning with a long-term strategy.
Coinbase (COIN) shares rose over 5%, and Microstrategy (MSTR), reportedly holding nearly 175,000 bitcoins, gained 7% in response to Bitcoin's rally, marking a 150% increase in value so far in 2023.
The broader context reveals Bitcoin's journey from just over $5,000 at the start of the pandemic to nearly $68,000 in November 2021, followed by a retreat due to Federal Reserve rate hikes and the collapse of FTX. The current rally is fueled by optimism surrounding the potential approval of spot bitcoin ETFs, which offer a new investment avenue.
Despite the excitement, experts caution about the inherent risks and unpredictability of the crypto market. Recent regulatory actions, including a $4 billion fine for Binance, the world's largest crypto exchange, and the potential approval of spot bitcoin ETFs, shape the market dynamics. Binance's ability to continue operating after the settlement contributed to the market's forward momentum.
As of 1:30 p.m. Eastern time, Bitcoin's price stands at $41,709. The performance of other cryptocurrencies, such as Ethereum, Binance Coin, and Dash, varies, underlining the diverse nature of the crypto market.
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