The cryptocurrency market started the year with strong gains. Bitcoin recorded a three percent increase in trading today, Tuesday. It exceeded the $45,000 barrier for the first time since April 2022, marking a strong start to the new year as the largest and most famous cryptocurrency in the world.
Bitcoin rose to reach a 21-month high of $45,386 earlier today. In the previous trading session, it recorded a two percent increase reaching $44,980. Meanwhile, Ethereum rose 1 percent recording a price of $2,376.
150 percent gains
Bitcoin, the most famous and largest cryptocurrency in the world, recorded gains of more than 150 percent last year. It experienced an ‘awakening’ in the cryptocurrency market following the many political, geopolitical, and economic challenges that have been happening. This prompted investors to search for safe havens and diversify their investments.
After Bitcoin started 2023 at $16.6 thousand, it ended the year above the$42 thousand mark. Despite that, it is still far from the highest it recorded in November 2021 when it exceeded $68.7 thousand.
Cryptocurrency challenges
2023 was a somewhat confusing year for the cryptocurrency market. It faced many challenges including tightening regulatory restrictions and the exit of some platforms from major markets. On the other hand, the momentum surrounding private funds in cryptocurrencies constituted an impetus for the market to achieve relative gains.
Bitcoin’s price reached its highest level ever at about $69,000 in November 2021. Since then, the currency has lost about 60 percent of its value.
Read: Gold market hits positive momentum to kick off 2024
High-risk assets
Earlier, Michael Safai, founding partner at Dexterity Capital, stated that with the reversal in interest rates, investors will return to riskier assets in search of better returns. Hence, Federal Reserve board member, Christopher Waller, said he is optimistic about the recent slowdown in economic activity. This may indicate that central bank policy is sufficiently tight.
Safai added that this, coupled with the momentum that cryptocurrencies have built in recent months with ETFs, has traders feeling that the conditions are right for a new increase in prices.
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