Bitcoin has doubled in price in a year: Reasons explained
Bitcoin reached the level of 40 thousand dollars for the first time in 2023
Bitcoin surpassed the $40,000 mark for the first time this year, as momentum builds over the anticipated reduction in interest rates in the United States. The cryptocurrency's surge is also fueled by expectations of swift approval for Bitcoin funds trading on the stock market, according to Reuters.
Bitcoin reached a level of $40,210, marking its highest point since April 2022.
Over the past year, Bitcoin has more than doubled in value, casting off the funk that had settled over crypto markets since the collapse of FTX and other crypto-business failures in 2022
Riskier investments and other assets sensitive to interest rates, such as gold, have also experienced significant growth in recent weeks as markets bet on the Federal Reserve halting rate hikes and possibly lowering them in early 2023.
Reports in October indicating that the U.S. Securities and Exchange Commission would not contest a court decision, which found the agency had erred in rejecting a cryptocurrency firm Grayscale Investments' application for an exchange-traded fund, have also fueled speculation that final approval is imminent.
Bitcoin, however, remains significantly below its 2021 record high of over $60,000.
Risky asset
Bitcoin is an extremely volatile and risky asset. Its value can fluctuate by more than 10% in a single day.
The National Bank of Ukraine does not consider cryptocurrency as a payment method. As noted by the First Deputy Head of the National Bank, Kateryna Rozhkova, serious shocks have been witnessed in U.S. markets where cryptocurrencies purportedly backed by physical dollars turned out to be unsecured, posing substantial risks.
