scorecard
  1. Home
  2. cryptocurrency
  3. news
  4. Bitcoin touches $42,000 as gains this year outpace US stocks and gold

Bitcoin touches $42,000 as gains this year outpace US stocks and gold

Aruni Soni   

Bitcoin touches $42,000 as gains this year outpace US stocks and gold
  • Bitcoin touched a 20-month high at $42,000 on Monday before paring back gains.
  • The cryptocurrency is riding hopes about Fed rate cuts, helping investors turn to riskier assets.

The crypto rally is marching on, and it's pushed the price of bitcoin to a 20-month high.

Bitcoin touched $42,000 on Monday before paring back gains at $41,616. The currency has been rising at a fast clip in recent months, putting year-to-date gains at over 150%. That's more than the S&P 500 (20%), Nasdaq (47%), and gold (14%).

The bitcoin surge has also helped crypto stocks like Coinbase, Riot Platforms, and Microstrategy witness triple-digit rallies this year.

Fueling the momentum in both the broader market and cryptos is a growing conviction that the Federal Reserve is not only done with rate hikes but ready to pivot to rate cuts next year.

After a benign inflation report in November, stocks took off on an eye-watering rally, with the S&P 500 gaining about 9% last month. Those hopes about a Fed policy pivot have helped bitcoin maintain gains as well, as investors returned to riskier assets.

Crypto bull Mike Novogratz said last week that rate cuts from the central bank would release "animal spirits" on financial markets, and an upside is coming for bitcoin.

Optimism surrounding a potential spot bitcoin ETF approval is another piece helping thaw the ice from the crypto winter of 2022. Markets have been rallying on the prospect of a regulatory green light after an August court ruling in favor of Grayscale Investments' ETF plan.

BlackRock, VanEck, Invesco and Fidelity are among other Wall Street heavyweights that have an ETF application in the SEC approval pipeline.

Then there's the upcoming halving cycle scheduled for April that poses a bullish tailwind for bitcoin. That's because it foreshadows increasing scarcity in the bitcoin market, propping up prices.

Some experts see crypto soaring to $100,000 in 2024 citing the huge gains bitcoin has seen in the year following a halving. That would surpass bitcoin's record high of $69,000 set in 2021.




Advertisement