Bitcoin Hits $41,000 for 1st Time Since April 2022. What’s Behind the Price Surge? - GV Wire - Explore. Explain. Expose
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Bitcoin Hits $41,000 for 1st Time Since April 2022. What’s Behind the Price Surge?



Bitcoin's value soars past $41,000, fueled by prospects of spot bitcoin exchange traded funds approval and investors returning amid cooling inflation. (AP File)
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NEW YORK — Bitcoin is once again having a moment. On Monday, the world’s largest cryptocurrency soared past $41,000 for the first time in over a year and a half — and marking a 150% rise so far this year.

The Rise and Fall of Bitcoin

Volatile bitcoin rocketed from just over $5,000 at the start of the pandemic to nearly $68,000 in November 2021, according to FactSet, a period marked by a surge in demand for technology products. Prices fell back to earth during an aggressive series of Federal Reserve rate hikes aimed at taming inflation and then the collapse of FTX, one of the biggest companies in crypto.

Investors Return to Bitcoin

When 2023 began, a single bitcoin could be had for less than $17,000 after losing more than 75% of its value. Investors, however, began returning in large numbers as inflation started to cool. And the collapse of prominent tech-focused banks actually led more investors to turn to crypto as they bailed out of positions in Silicon Valley start-ups and other risky bets.

The Role of Exchange Traded Funds

But fueling this latest rally are prospects for the possible approval of spot bitcoin exchange traded funds — a pooled investment security that can be bought and sold like stocks.

Regulatory Challenges and Opportunities

Industry advocates say this new way of investing in bitcoin at spot prices, instead of futures, could make it easier for anyone to enter the cryptoverse while lowering some of the well-documented risks associated with investing in cryptocurrencies. Regulators have previously rejected bitcoin spot ETF applications, but recent wins for some crypto fund managers have improved odds for a first approval, perhaps as soon as next month.

Current State of Bitcoin

Bitcoin’s current rally also arrives during an incredibly disruptive period for cryptocurrencies. Just last month, the U.S. government slapped Binance, the world’s largest crypto exchange, with a $4 billion fine as its founder Changpeng Zhao pleaded guilty to a felony charge.

Investor Caution

Despite the recent excitement around bitcoin, experts still maintain that crypto is a risky bet with wildly unpredictable fluctuations in value. In short, investors can lose money as quickly as they make it.

Other Cryptocurrencies

The stocks of some other crypto players have also seen rises over recent months, but not with the same speed or heights as bitcoin. Ethereum, for example, stood at $2,223 Monday afternoon, up 85% since the start of 2023. Meanwhile, Binance Coin and Dash are down about 5.25% and 24.37% for the year, respectively, with Monday afternoon prices of roughly $231 and $32.


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