After crashing nearly 50 per cent in January from an all-time high of $67,566 in November last year, the world’s biggest cryptocurrency Bitcoin hit its highest price of $42,873 on Monday in two weeks, up 28 per cent from the lowest $33,495 on January 24, as per data from CoinMarketCap. Bitcoin had jumped 14 per cent in the past week from $37,217.

Ethereum too had jumped to its highest level — $3,097 on Monday since $2,199 on January 24 – the lowest in 2022. The surge came alongside a rally in US stocks with Nasdaq ending last week with gains, according to expert.

“I don’t see any other reason for the jump in Bitcoin prices. It is mostly macro driven. The US Federal Reserve did some quantitative tightening with an interest rate hike. As a result, equity and crypto markets moved. The crypto market is now somewhat in tandem with equity markets. This shows that people have started to view it as a legitimate asset, like a tech stock to that extent. This is a big development,” Atul Chatur, Co-founder at blockchain startup incubator Antilles Cryptocurrency Ecosystem told Financial Express Online. 

Importantly, the launch of the first Bitcoin spot exchange-traded fund (ETF) is also likely this year after multiple Bitcoin-linked ETFs came up last year. The upcoming spot ETF is expected to move crypto markets significantly.  

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“Bitcoin spot ETF approval is around the corner. It will get approved in around the next six months. That’s one of the major things to watch out for and then markets will move big time,” added Chatur. According to a Reuters report, The US Securities and Exchange Commission last week had delayed a decision on a proposal to list and trade a spot ETF by the world’s largest digital current manager Grayscale Bitcoin Trust. 

However, experts see more than 50 per cent price decline (below $30,000) this year in Bitcoin from its peak in November last year as the Bitcoin bubble begins to deflate, according to investment management firm Invesco. In a list of 10 improbable but possible outcomes for 2022, Invesco’s global head of asset allocation Paul Jackson said that the mass marketing of Bitcoin reminds us of the activity of stockbrokers in the run-up to 1929 crash – the American stock market crash.

The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.