Ethereum also rose past $2,200 for the first time in months.
The price of Bitcoin (BTC) hit $40,000 on Sunday for the first time since early May 2022, while Ethereum (ETH) rose past $2,200 amid a broader – if subdued – rally in the crypto markets.
Bitcoin’s price had been toying with the $40,000 level in recent days, but finally breached it Sunday to trade above $40,600 as of press time, according to CoinDesk Indicies data, a 24-hour rise of about 3%. Ethereum was trading hands at $2,205, a similar percent rise over the past 24 hours. Most other top-10 cryptocurrencies by market capitalization marked smaller gains, though BNB coin, a token affiliated with the Binance exchange, was down about 0.1% over the past day.
The price of the world’s largest and oldest cryptocurrency fell below $40,000 in April 2022, but has been rallying over the past few months largely due to seemingly dovish comments from U.S. central bankers and hopes that a spot bitcoin exchange-traded fund (ETF) may be approved to launch in the country.
Ethereum had similarly not traded hands above $2,200 since May 2022, though it’s come close a few times.
Read more: Bitcoin Eyes $40K as $1B in BTC Withdrawals Suggests Bullish Mood
Bitcoin holders withdrew 37,000 BTC between Nov. 17 and Dec. 1, suggesting they were taking direct custody of their coins, CoinDesk reported earlier this week.
The move comes days after gold futures reached a record high $2,087 after Federal Reserve chairman Jerome Powell said interest rates are now well into restrictive territory.
“The market is increasingly expecting a rate cut in the coming year and investors are increasingly bullish on the outlook of Bitcoin ETF applications by some of the biggest names in asset management,” wrote Lucy Hu, Senior Analyst, Metalpha, in a note. “This is an official statement of a bull run and the price could see more upticks in the coming weeks.”
Powell’s comments played into the narrative that the tightening cycle has peaked, pushing bond yields lower.
“Crypto, on the other hand, has been moving nicely higher, along with Gold, on the back of lower yields,” crypto data provider Amberdata said in a newsletter Sunday.
“Bitcoin has been eager to jump higher, even without the Spot ETF catalysts headline hitting the wires, the market is looking to get long,” Amberdata added.
Traders have loaded up on topside option plays in recent weeks, betting on bitcoin’s eventual rise to $45,000 by the end of March 2024.
The week ahead will bring U.S. ISM services PMI data and non farm payrolls for December. A strong NFP figure might result in unwinding of Fed rate cut bets for 2024, slowing BTC’s ascent.
