Bitcoin, the world’s most prominent cryptocurrency, surged past $38,000 on Friday for the first time this year. The cryptocurrency gained around 1.5% on Friday to trade above the $38,000-level for the first time since May 2022 in line with gains in other crypto assets such as Ether and Solana, reported CNBC.
Here are the main factors that fuelled the rally in Bitcoin.
Resolution Of Binance’s Legal Troubles
One of the major factors contributing to Bitcoin’s rise is the resolution of Binance’s legal troubles.
Changpeng “CZ” Zhao, the CEO of Binance, the largest crypto exchange in the world, agreed to plead guilty to federal criminal charges brought by the US Department of Justice, reported Reuters.
This settlement has instilled renewed confidence among the investors, easing concerns about the exchange’s future and its impact on the broader cryptocurrency market which is still recovering from the 2022 FTX’s failure.
The development has also come within a month of FTX founder Sam Bankman-Fried’s conviction in a federal fraud and conspiracy trial.
Anticipation Of Bitcoin ETF Approval
The rally in Bitcoin has also come amid expectations of approval of a Bitcoin exchange-traded fund (ETF). An ETF would allow traditional investors to gain exposure to Bitcoin without directly owning or managing the cryptocurrency, potentially expanding its investor base and driving further demand.
Bitcoin (BTC) has been range bound since March, fluctuating between a support level of $25,000 and a resistance level of $30,000.
In October, rumours of a spot ETF approval sparked a price surge, driving BTC from below $27,000 to over $38,000 by Friday.
Investors also weighed the minutes of the Federal Open Market Committee meeting, which were also released on the day of the settlement. The minutes showed that officials expressed little appetite for cutting interest rates anytime soon, which could have a dampening effect on risk assets like Bitcoin.
The Fed’s hawkish stance is likely to keep Bitcoin prices in check in the near term, but the overall outlook for the cryptocurrency remains positive.