Bitcoin and other cryptocurrencies have maintained their high values, with Bitcoin trading near $35,200, nearing its recent peak of $36,000. This represents some of the highest prices since May 2022's severe bear market and a significant recovery from its December low of $16,000. The recent rally triggered a 30% surge in Bitcoin's value within mere weeks, breaking away from the previous low volatility phase.
The price stabilization is linked to expectations that the Federal Reserve's interest rate hikes have ceased due to weaker U.S. jobs data. Bitfinex and CTF Capital share this outlook, which is bolstered by the U.S. Labor Department's report of only 150,000 new jobs in October compared to September's 297,000. The potential stoppage is also tied to escalating bond yields and tightening financial conditions. Traders now anticipate a 95% likelihood of unchanged rates in December, up from 80% before the jobs data. Bitfinex analysts suggest wage-driven inflation could be subsiding, consistent with the Fed's pause in rate hikes. The Federal Open Market Committee's recent decision to retain the benchmark federal funds rate at 5.25%-5.50% reinforces this view.
Key catalysts for this surge include anticipated U.S. regulator approval of the first spot Bitcoin exchange-traded fund (ETF) and Middle East geopolitical risks, reinforcing Bitcoin's "digital gold" status. This scenario is fostering investments in riskier assets like cryptocurrencies. The anticipation of the US SEC approving Bitcoin ETFs has fueled a 25% rally over two weeks. Darius Tabatabai from Vertex (NASDAQ:VRTX) Protocol and James Butterfill from CoinShares indicate bullish sentiment towards an imminent Bitcoin ETF listing in the US, following Grayscale Investments LLC's successful bid to create one.
Growth is also seen in other digital assets like Ether and altcoins such as Cardano and Polygon. Projections indicate Bitcoin could approach $50,000 in the near future. Despite potential short-term pullbacks, Bitcoin is expected to continue its upward trajectory, potentially reaching or surpassing its previous record of almost $69,000. Bitcoin's value dipped slightly by 0.4% to $34,920 according to CoinGecko, while US equities and the crypto space continue their positive performance amid these developments.
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