Advertisement
Bitcoin exhibited a robust rebound, surpassing the $43,000 mark and reclaiming positive territory for the year. The cryptocurrency, up by 2.93% at $43,097.35 according to Coin Metrics, has managed to offset losses incurred earlier in the year after the long-anticipated approval of spot bitcoin ETFs. Bitcoin concluded 2023 around $42,000 and has now achieved a 1.25% gain in the first month of 2024.
Ether, the second-largest cryptocurrency, experienced a 2.06% increase, reaching $2,304.82. Among altcoins, Solana’s SOL token and Cardano’s ADA demonstrated notable gains, rising by 6.8% and 7.4%, respectively.
Bitcoin ETFs played a pivotal role in recent price movements, with concerns about outflows from the Grayscale Bitcoin ETF gradually diminishing last week. While ETFs continue to influence the market, broader macroeconomic factors are also under scrutiny. The upcoming Federal Reserve policy meeting, scheduled to commence on Tuesday, is a key focus for investors. While expectations lean towards the Fed maintaining current interest rates, investors are hopeful for indications of potential rate cuts, possibly as early as March. Such cuts could stimulate risk-taking and benefit the tech sector, creating favorable conditions for bitcoin.
Callie Cox, an analyst at investment firm eToro, emphasized the positive impact of the current rate environment on bitcoin. Cox stated, “The rate environment is still working in bitcoin’s favor. Inflation has come down to the Fed’s target, and they have a strong argument to cut in the next few months.” She further noted bitcoin’s historical outperformance against the S&P 500 on Federal Reserve days, especially in the context of inflation.