Bitcoin Hits 19-Month High of $42,000; Will the Momentum Hold?

Vignesh Karunanidhi
Bitcoin Hits 19-Month High of $42,000, Will the Momentum Hold?
Source: Twitter

The price of Bitcoin erupted 5% higher Monday to a 19-month peak above $42,000. The surge comes as cryptocurrencies bask in the glow of improving macroeconomic trends and an increasing appetite for crypto exposure among stock investors. However, the price of BTC dropped to $41,600, with a 0.7% drop in value over the last hour.

Ethereum likewise rose over 3% to breach $2,200 as bulls regained the momentum lead in digital asset markets after a grueling year dominated by Fed tightening and an industry crisis of confidence.

Also read: Will Bitcoin ETF Approval Be a Sell-The-News Event?

Bitcoin has surged 144% year-to-date

Nevertheless, with rates potentially set to fall in 2023, investors piled back into crypto to start the year. Bitcoin has already gained nearly 144% over the past 12 months, still grappling with last May’s Terra stablecoin wipeout.

Adding further rocket fuel is the growing prospect of SEC approval for a spot Bitcoin exchange-traded fund (ETF) that would unlock billions in inflows from equity holders. BlackRock and Ark Invest represent major financial players seeking such offerings.

Analysts have argued that the approval of a Bitcoin ETF could pave the path for better adoption and more institutional investments.

Following last year’s macro-fueled volatility, both institutional and retail players took shelter, awaiting clearer opportunities to dive in. Their renewed participation spotlights growing confidence in a durable reversal of crypto market fortunes after the devastating failure of Terra and FTX in 2022.