- The price of Bitcoin topped $42,000 on Monday.
- The leading cryptocurrency is showing strong upside momentum.
- ETF FOMO is attributed to the upside swing in price.
Bitcoin’s meteoric rise past the $42,000 mark on Monday at the time of writing has been fueled by speculative fervor regarding the potential approval of spot exchange-traded funds (ETFs). This latest rush of investor FOMO can be traced back to BlackRock’s ETF filing in June, which triggered a flood of copycat filings from competing asset managers all vying to bring the first US-based Bitcoin fund to market.
The Securities Exchange Commission (SEC) has kept notoriously quiet about if and when it might give the regulatory green light. This has only intensified speculative trading, as investors anticipate an imminent flurry of ETF approvals that could unlock billions in institutional money into Bitcoin. With no signals from the SEC, traders plowed into Bitcoin on Sunday, sending the leading cryptocurrency to an 83-week high.
Bitcoin Soars Past $42,000
Strong buying activity on Monday drove Bitcoin’s price past $42,000 at the time of writing, marking an 83-week high. The surge was fueled by ETF FOMO, with some observers calling it the end of the bear market. The decisive move past the psychological $40,000 mark convinced many investors to buy in, driving the price further.
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Following a somewhat hesitant November, in which BTC ranged between $34,200 and $38,500 with no decisive direction, the leading cryptocurrency opened the new month with three consecutive daily green closes, taking Bitcoin to a yearly high of $42,000 on Monday. Bitcoin has so far retained most of the weekend’s gains, suggesting that investors are holding on in anticipation of further price rises.
Bitcoin’s recent surge is reminiscent of the December 2020 frenzy, when the leading cryptocurrency recaptured its $20,000 previous all-time high, signaling the end of the then bear cycle. It peaked at $65,000 in April 2021 and $69,000 in November 2021. As expected, price conviction this time is as hopeful as three years ago.
ETF FOMO
Detailing the price conviction behind the latest move higher, X account the Kobeissi Letter noted that ETF FOMO had sent Bitcoin up $2,000 in 24 hours, marking a 175% gain in value compared to a year ago.
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According to the Kobeissi Letter, Bitcoin’s upside momentum is the strongest seen since the November 2021 previous cycle top. This comment brings welcome news for investors who expect further price rises, particularly as the halving approaches and central banks eventually cut interest rates.
However, the elephant in the room is that a Bitcoin ETF has yet to be approved by the SEC. Chiming in with his take, Bloomberg analyst Eric Balchinas recently reiterated his 90% call in favor of a spot BTC ETF being approved by January 10, 2024.
On the Flipside
- Peter Schiff expressed his doubts over the SEC greenlighting a BTC ETF.
- Although some took the move past $40,000 as a return to the bull market, BTC remains 40% below its previous all-time high.
- Commentators, including Samson Mow, have predicted that BTC could go as high as $1 million this cycle top.
Why This Matters
Although bullish price movements are a welcome return for crypto investors, it’s important to note that the SEC has yet to approve a spot ETF. As such, relying on the SEC as a bull market catalyst is a precarious position.
Learn more about Bitcoin’s strong December performance here:
Bitcoin Breaks 2023 Peak to Liquidate Bears Across the Board
Find out what Binance’s new CEO said about the record $4.3B DoJ fine here:
“Don’t Worry” About Binance’s $4.3B Fine: CEO Richard Teng
