Bitcoin soared to its highest price in nearly 20 months, reaching more than $42,000 in the early hours of Monday before falling back to $41,752.90 by night, thanks to frenzied investor speculation that interest rates will fall as 2024 approaches.
Following the same speculation that interest rates might fall in 2024, the price of gold also surged to its all-time high, reaching $2,135 per troy ounce, before falling to $2,046 per troy ounce, LSEG data showed.
The market’s positive performance was also felt through assets across the globe, following a recent rush into stocks and bonds as expectations remain high among investors.
While the chair of Federal Reserves Jay Powell cautioned that it was premature to conclude that the apex bank has won its battle against inflation, investors remain optimistic that the Fed will cut borrowing costs.
Investors’ interest in buying crypto heightened
The value of Bitcoin has climbed 12% in the last seven days, which could be attributed to the growing interest among crypto investors after high-profile crypto criminal cases in the U.S. came to “commendable” closure.
In November, a former executive at FTX and Binance Sam Bankman-Fried was found guilty and convicted of fraud.
Binance was also penalized and paid $4.3 Billion in fines after the exchange pleaded guilty to criminal charges related to money laundering and financial sanctions breaches.
While the trial of Binance was in progress, investors had feared that any move to shut the exchange might signal the end of cryptocurrency, but US authorities did not shut down the exchange.
Bitcoin’s price has also influenced the value of Altcoins. For instance, Ethereum surged by 2.81%, DOGE by over 5%, and Bitcoin Cash by 9 per cent in the last 24 hours.
The crypto market also saw Terra Classic (LUNC) price jump by 25%, which analysts described as a pump-and-dump scheme.