(TheConservativeTimes.org) – At its peak Bitcoin surged to a high of more than $42,000, plateauing out to a little more than $41,000, the first time the cryptocurrency has reached such prices in more than a year.
Observers claim that rumors that the Federal Reserve is poised to lower borrowing rates in the near future had an effect on the increase in Bitcoin’s price. News that interest rates could be cut also fueled a rally in the price of gold (Bitcoin is incidentally called “digital gold” by some investors), as well as many investors’ rush to put money into stocks and bonds, the Financial Times reported.
Another possible catalyst behind the price rally, this time according to Bloomberg, is the possibility of more cryptocurrency exchange-traded funds (ETFs) being green-lighted by the Securities and Exchange Commission (SEC). If all goes well, the approvals for more ETFs could come as early as next month, reports say.
“The race is heating up to launch these vehicles,” Moody’s Analytics senior director Yiannis Giokas told Bloomberg. Large asset managers, he added, are poised to acquire the underlying asset.
Coinglass, a platform that provides analysis on crypto derivative data, reports that in the last 24 hours, liquidations of Bitcoin short positions have reached as much as $109 million.
The price rally wasn’t limited to Bitcoin, however, other cryptocurrencies such as Ether and Dogecoin also saw a jump in value, increasing to $2,220 and 9 cents, respectively.
Reports say that the reduction in interest rates could happen as early as March next year, and even now, the U.S. bond market is experiencing the largest monthly rally in almost 40 years. More investors are venturing into riskier stocks, given the fact that the S&P 500 index recently closed at a more than a year high, with the U.S. economy exhibiting resilience and inflation trends downward.
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