The price of bitcoin (BTC) hit $40,000 on Sunday for the first time since early May 2022, while ethereum (ETH) rose above $2,200 amid a broader – if subdued – rally in crypto markets.
Bitcoin’s price had been toying with the $40,000 level in recent days, but finally broke through on Sunday and was trading above $40,600 at press time, according to CoinDesk Indices data, a 24-hour rise of around 3%.
Ethereum was trading at $2,205, a similar percentage increase over the past 24 hours. Most of the other top 10 cryptocurrencies by market capitalisation saw smaller gains, although BNB coin, a token associated with the Binance exchange, was down around 0.1% over the past day.
The price of the world’s largest and oldest cryptocurrency fell below $40,000 in April 2022, but has rallied in recent months, largely due to seemingly dovish comments from US central bankers and hopes that a spot bitcoin exchange-traded fund (ETF) could be approved for launch in the country.
Ethereum also hasn’t traded above $2,200 since May 2022, although it has come close a few times.
Bitcoin holders withdrew 37,000 BTC between 17 November and 1 December, suggesting they were taking direct custody of their coins, it was reported earlier this week.
The move comes days after gold futures hit a record high of $2,087 after Federal Reserve Chairman Jerome Powell said interest rates were now well into restrictive territory.
“The market is increasingly expecting a rate cut in the coming year and investors are increasingly optimistic about the prospects of bitcoin ETF applications from some of the biggest names in asset management,” Lucy Hu, senior analyst at Metalpha, wrote in a note. “This is an official statement of a bull run, and the price could see more upside in the coming weeks.”
Powell’s comments played into the narrative that the tightening cycle has peaked, pushing bond yields lower.
“Crypto, on the other hand, has moved nicely higher along with gold on the back of lower yields,” said crypto data provider Amberdata in a newsletter on Sunday.
“Bitcoin has been eager to jump higher, even without the headline spot ETF catalysts hitting the wires, the market is looking to get long,” Amberdata added.
