The price of bitcoin broke above the $43,000 level on Monday as the cryptocurrency extended its recent gains.
Bitcoin was last trading higher by 3% at $43,102.26, according to Coin Metrics. Bitcoin has fought back into the green for the year following steep losses after the long-awaited approval of spot bitcoin ETFs. Bitcoin closed out 2023 around the $42,000 level. It is now up about 2% for 2024, per FactSet.
Ether rose nearly 2% to $2,301.89. Solana’s SOL token and Cardano’s ADA led the crypto market gains. They rose 6% and 4%, respectively.
Bitcoin ETFs have been the biggest driver of the cryptocurrency’s price action in recent weeks. Outflows from the Grayscale Bitcoin ETF had disappointed some investors, who shook off those worries last week as they appeared to taper off.
While ETFs are still the main driver, they’re not the only one. Investors are still watching how macro influences impact price. In particular this week, the Federal Reserve’s policy meeting will begin Tuesday.
Investors are nearly certain the central bank will keep rates steady, but they are hoping for a hint from the Fed that it will begin cutting rates soon…maybe even as soon as March. Lower rates could boost overall risk-taking and the tech sector, both positive factors for bitcoin.
“The rate environment is still working in bitcoin’s favor,” said Callie Cox, analyst at investment firm eToro. “Inflation has come down to the Fed’s target, and they have a strong argument to cut in the next few months.”
“Bitcoin has also thrived on Fed days with inflation,” she added. “It’s outperformed the S&P 500 in nine out of the last 12 Fed days counting back to July 2022.”