Bitcoin, the world’s largest cryptocurrency, continued its recent upward momentum on Friday, gaining over 2% to reach near a 19-month high price point of $38,410. Bitcoin has been on a rally since October, with improving investor sentiment and risk appetite providing tailwinds.
Several key factors are contributing to bitcoin’s ongoing price appreciation. These include growing optimism that a spot bitcoin exchange-traded fund (ETF) may soon be approved by regulators. Approval could unleash significant new capital inflows into the digital asset sector.
Additionally, the recent resolution of uncertainties around major crypto exchange Binance and increasing likelihood of accelerated money printing in 2024 are also boosting bitcoin prices, according to crypto-focused economist Noelle Acheson. The confluence of these catalysts continues to gather strength.
Shares of cryptocurrency mining companies and bitcoin-tracking firms climbed significantly in premarket trading on Friday, rising between 2.4% to 4%. These include Riot Platforms, Marathon Digital, Cipher Mining and TeraWulf.
As bitcoin prices rise, profitability for miners improves substantially. JP Morgan raised its price targets for several mining stocks to reflect bitcoin’s rally. Miners are also increasing production ahead of bitcoin’s “halving” event in 2024 which will cut mining rewards per bitcoin in half. Additionally, you can also read about- Top 10 Play-to-Earn NFT Games for Making Money in 2023
Canaan Inc, a major bitcoin mining machine manufacturer, saw its shares add nearly 4%. Other gainers included software developer and bitcoin investor Microstrategy, up nearly 5%, and the ProShares Bitcoin Strategy ETF, up 2%.
Beyond bitcoin, the price surge reflects improving sentiment across the crypto asset sector. Crypto exchange Coinbase saw its shares rise 2.6% following a 62% rally in November even amidst declining trading volumes.
“Higher crypto prices should boost transaction volumes and revenues for Coinbase entering 2024,” said CFRA Research analyst Michael Elliott. However, likely legal issues and incoming crypto regulation could continue causing volatility.
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