Plus500 does not provide CFD services to residents of the United States. Visit our U.S. website at us.plus500.com.

Bitcoin Prices Soar Past $41k

Plus500 | Monday 04 December 2023

Bitcoin prices soared past a whopping $41,000 on Monday, December 4, for the first time since May 2022 just a few weeks after it made headlines for rising past $36,000

These gains may come as much-needed news due to the drops experienced in 2022 in light of the Crypto Winter whereby many Cryptocurrencies suffered notable losses amidst the FTX collapse, regulatory pressures, and negative market sentiment. 

So what’s driving Bitcoin upward and what might the Crypto market’s trajectory look like in the near future? Here’s what you need to know about Bitcoin’s stellar growth:

An illustration of Bitcoin prices

Bitcoin 2023’s Gains

Despite 2022’s losing streak and Crypto woes, since the beginning of the year and up till the time of the writing Bitcoin (BTCUSD) managed to gain over 151%. 

Bitcoin price chart on the 4th of December 2023

Accordingly, this success is reflected in the Crypto 10 index (Crypto10), an index that gauges the performance of the top 10 Cryptocurrencies in the market and which has risen by more than 94% since the start of the year and up till the time of the writing. 

Crypto10  price chart on the 4th of December 2023

Reasons Behind Bitcoin’s Rebound and Growth 

Among the many factors that may have pushed Bitcoin upward, the dovish Fed monetary policy, and the possibility of Bitcoin ETFs are the most prominent.

According to some market analysts, “Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024.”

Hopes of Rate Cuts 

While numerous Central Banks, including the Federal Reserve (FOMC), have recently embraced an ostensibly hawkish stance amid escalating inflation and recessionary concerns, there is a discernible optimism among investors regarding the potential emergence of a more dovish monetary policy. 

This optimism stems from observations suggesting a slight easing of inflationary pressures, raising speculation about a possible shift in the Federal Reserve's policy direction.

If the Fed does end up cutting rates, then it could provide Crypto with a bigger boost. This is because higher interest rates usually lead to investors losing confidence in risky financial instruments such as Cryptocurrencies as they may tend to invest in safe-haven assets instead. 

Possibility of Crypto ETFs

The possibility of Crypto ETFs has been increasing recently and has made the traction around Cryptocurrencies like Bitcoin even more intense. 

The potential realization of Crypto ETFs could lead to their availability on conventional stock exchanges, streamlining regulations and trading processes. 

This becomes particularly significant since Cryptocurrencies faced regulatory challenges and pressures in 2022, making Crypto ETFs a potentially beneficial catalyst for the Crypto market.

Nonetheless, it is yet to be determined whether or not Crypto ETFs will be approved, but according to many analysts, the approval could come in 2024. (Source: CNBC)

Where Might Crypto Be Headed Next?

While the trajectory of the Crypto market is still opaque, many scheduled events and factors could play into it

Perhaps one of the most crucial events that could shift the Crypto market and cause volatility in Bitcoin prices is the upcoming Bitcoin Halving event in 2024

A Bitcoin Halving event occurs every 4 years and cuts/halves Bitcoin production, which, in turn, makes it rarer. 

Historically, the price of Bitcoin soared in the past 3 Bitcoin halvings, but only time will tell what this Halving will usher forth to the Crypto market. 

In addition, some analysts seem to be bullish as they believe that Bitcoin could rise past $150,000 in 2025. 

However, it is important to note that these are predictions and that past performance does not indicate future results. 

Conclusion 

Bitcoin is still rebounding from 2022’s lows as it soared past $41,000 on Monday. Several factors contribute to the notable shift in Bitcoin's prices. 

The growing optimism surrounding a dovish monetary policy and potential rate cuts, coupled with the increasing likelihood of Bitcoin ETFs, are key drivers propelling this prominent Cryptocurrency to higher levels.

Traders will have to wait and see what the future holds for this popular Cryptocurrency.


Get more from Plus500

Expand Your Knowledge

Videos & Articles help you expand your trading knowledge.

Prepare Your Trades

Our Economic calendar helps you explore global market events.

Trade Without Surprises

Understand the full costs of your trades now for better expense management later.


This information is written by Plus500 Ltd. The information is provided for general purposes only, and does not take into account any personal circumstances or objectives. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. No representation or warranty is given as to the accuracy or completeness of this information. It does not constitute financial, investment or other advice on which you can rely. Any references to past performance, historical returns, future projections, and statistical forecasts are no guarantee of future returns or future performance. Plus500 will not be held responsible for any use that may be made of this information and for any consequences that may result from such use. Hence, any person acting based on this information does so at their own discretion. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research.

Need Help?
24/7 Support