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Bitcoin surges past $40,000 in record-breaking bull run

Bitcoin has over $40,000 for the first time since May 2022, riding a wave of momentum fueled by widespread optimism about interest rate reduction in the United States and speculators betting on the expected approval of stock market-traded bitcoin ETFs in the United States.

The world's largest cryptocurrency surpassed US$41,748 on Monday, its highest level since April 2022, potentially lifting the gloom that had descended on crypto markets following the fall of FTX and other crypto businesses last year.

It was recently trading at US$41,627, up 4%. Its 50% gain since mid-October has "seemed to mark a decisive shift away from the bearishness of 2022 and early 2023," according to Justin d'Anethan, Asia-Pacific head of business development at Keyrock, a digital assets market maker.

D'Anethen stated that signs of institutional purchasing through November indicated a fresh leg of interest and that, while reversals were not ruled out, lows around $16,000 a year ago "probably marked the bottom."

Bitcoin has increased by more than 150% so far this year.

Microstrategy (MSTR.O), a bitcoin investor, said last week that it purchased an extra US$593 million in bitcoin in November.

Meanwhile, riskier investments and other interest-rate sensitive assets, such as gold, have risen sharply in recent weeks as markets bet that the US Federal Reserve has completed its rate hikes and would begin lowering rates early in 2024.

Reports in October that the Securities and Exchange Commission will not appeal a court verdict that ruled the agency was incorrect to deny an exchange-traded fund application fueled speculation that approval is imminent.

A spot bitcoin ETF might provide previously hesitant investors access to cryptocurrency through the stock market, bringing in a new surge of wealth.

Investors have also cheered the resolution of a multi-year criminal investigation into Binance, the world's largest crypto exchange and a vital cog in the global crypto market. The agreement, which saw Binance founder Changpeng Zhao resign after pleading guilty to violating anti-money laundering regulations in the United States, permits the business to continue operations.

Ether, the cryptocurrency tied to the Ethereum blockchain network, reached a one-and-a-half-year high of US$2,264 on Monday.

Both Bitcoin and Ether are still well behind their 2021 record highs of US$69,000 and US$4,868.