The price of Bitcoin (BTC) is surging, reaching over $44,000 for the first time in over 19 months. This rally indicates the ongoing bullish sentiment of traders towards Bitcoin, marking its best November performance since 2020.
The surge to $44,000 is mostly attributed to the market’s anticipation of the approval of a spot BTC exchange-traded fund (ETF) in January 2024, which is attracting substantial cash inflows from institutional investors.
Now that BTC has achieved its best monthly close in 19 months, it’s important to understand the key reasons behind its current price surge.
Recovery of Centralized Exchange Volumes
Initially, Bitcoin price showed mixed signals following the guilty plea of former Binance CEO Changpeng “CZ” Zhao, and the subsequent settlement with the U.S. Department of Justice (DOJ). However, the market observed that Binance did not experience a mass exodus of funds as initially feared, indicating a positive outlook. Binance’s Bitcoin reserves are starting to rebound, while the overall Bitcoin reserves on exchanges are at multi-year lows, suggesting decreased selling pressure.
Potential Approval of Spot BTC ETF Boosts Market Sentiment
Despite certain macro headwinds, Bitcoin price continues to climb, with analysts speculating that the recent Binance settlement might be a positive factor for the approval of a spot Bitcoin ETF. This positive sentiment, along with increased institutional investor inflows, has propelled BTC’s market cap to become the 10th-biggest asset by that measure.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Institutional Investor Inflows Total $1.8 Billion Year-to-Date
Institutional investors have already started deploying funds to Bitcoin and crypto, with over $1.76 billion pushed into crypto assets in the past year, and the majority directed towards Bitcoin. The recent surge in institutional inflow to Bitcoin further supports the positive market sentiment.
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