Bitcoin’s market cap surged over $40 billion in the past 24 hours, propelling the leading digital asset’s value up by approximately 5% to briefly surpass $43,000 before retracing slightly, according to CryptoSlate’s data.
This upward movement marks a reversal from a recent dip in BTC’s value earlier in the week, causing significant losses for traders anticipating further price hikes.
Bitcoin’s fortunes took a turn after the Federal Reserve hinted at future interest rate cuts during its December Federal Open Market Committee (FOMC) meeting. The officials projected a potential decline to 4.6% by the end of next year, indicating approximately three 25-basis point cuts from the current Fed funds rate of 5.25%.
Markus Thielen, Matrixport’s head of research, highlighted that after the Fed concluded its rate hikes and maintained rates for around seven months in 2019, Bitcoin prices soared nearly 300%.
Thielen further explained that crypto tends to face challenges in low liquidity environments, as observed in 2022. However, it thrives when there’s a shift in expectations towards future ample liquidity, clarifying the reason for Bitcoin’s decline in 2022 and subsequent rise in 2023.
So, he concluded that:
“Even if the SEC still disapproves of Bitcoin Spot ETFs in January 2024, we will likely see higher crypto prices in 2024.”
Large-cap altcoins rally
Meanwhile, Bitcoin’s price increase positively impacted the prices of large-cap alternative cryptocurrencies like Ethereum, Avalanche, Cardano, Solana, etc.
Data from CryptoSlate shows that Ethereum’s value increased by more than 4% to $ 2,277 as of press time. CryptoSlate reported a continued shift in the economic model of the second-largest cryptocurrency by market capitalization, with more than $2.5 billion in coins burned since it completed the Merge.
Cardano’s ADA token surged by more than 12% to $0.65, a new yearly high, continuing a recent positive trend pushing its value up 107% on the year-to-date metric. Additionally, decentralized finance activities on the network have witnessed a resurgence, with the total value of assets locked now at an all-time high of $450 million, according to DeFillama data.
Similarly, Solana and Avalanche native tokens recorded substantial gains during the reporting period of around 10%, respectively.
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