Why is Bitcoin rising?

Why is Bitcoin rising?

Bitcoin’s rapid surge to $44,000, marking a 25% gain in the last week and a substantial 158% increase from a year ago, has left many wondering about the driving forces behind this crypto phenomenon in 2023. TechCrunch explores the factors contributing to Bitcoin’s price ascent and considers whether this positive trend will continue into the new year.

According to Tegan Kline, CEO of Edge & Node, the imminent approval of the spot bitcoin exchange-traded fund (ETF) is a key driver behind the recent price rise. Anticipation of the ETF’s approval has led to expectations of additional capital inflows once the ETF becomes operational.

Luke Nolan, a research associate at CoinShares, points to the mid-October ruling from the D.C. Circuit Court of Appeals as the “kick-off” for the Bitcoin rally. The court’s decision closed the June 2022 lawsuit between the Securities and Exchange Commission (SEC) and digital asset manager Grayscale, instructing the SEC to rescind its rejection of Grayscale’s bitcoin spot ETF application. Nolan suggests that the market has witnessed significant buying activity in anticipation of potential ETF launches and the perceived “stamp of approval” from the SEC, which could attract more capital to Bitcoin.

Joel Kruger, LMAX Group currency strategist, notes that Bitcoin’s price surge is accompanied by the highest trading volume since November 2022. He sees the anticipation of mass institutional and mainstream adoption in 2024 as a fundamental catalyst, with channels opening up for easier access to Bitcoin exposure.

As Bitcoin’s value continues to rise, observers are closely watching these regulatory and market developments, questioning whether the positive momentum will persist in the coming year.

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