Bitcoin surged past $43,000 on Wednesday afternoon before easing slightly, igniting a rally across crypto markets and stocks of digital asset-related companies as the Federal Reserve hinted at interest rate cuts.
This is the first time the token has passed the $43,000 threshold since a flash crash on Monday. The largest crypto asset hit $43,154 by late U.S. afternoon hours, climbing almost five percent from below $41,000 earlier in the day. As of Thursday 00:32 PM ET, it retraced to $42,795.
The Fed held rates steady at 5.25-5.5 percent on Wednesday, concluding the December Federal Open Market Committee (FOMC) meeting but signaled a dovish shift by projecting cuts next year. They anticipate the federal funds rate to fall to 4.6 percent by 2024 end, hinting at three 25-basis point cuts.
“Historically, a hold or reduction in interest rates tends to inject optimism among investors, as it implies more disposable income and potentially greater investment in various asset classes,” said Bitfinex analysts. “This effect is not limited to traditional markets but extends to novel assets such as cryptocurrencies.”
Beyond Bitcoin’s rise, large-cap altcoins like Avalanche (AVAX), Cardano (ADA) and Injective (INJ) soared with nearly 10 percent gains. These coins propelled the CoinDesk Smart Contract Platform Index (SMT) to the top of the crypto heap. The CoinDesk Market Index, a gauge of nearly 200 digital assets, climbed 3.8 percent over the past day.
The positive sentiment spilled over into crypto-related stocks. Coinbase (COIN) soared almost eight percent, and MicroStrategy (MSTR) added five percent to close out the trading session on a bullish note.
U.S.-based bitcoin miners like Marathon Digital (MARA), Riot Platforms (RIOT) and CleanSpark (CLSK), often used as gauges for BTC’s performance, surged between 8-16 percent throughout the day.
Bitcoin also hit record-breaking prices in Argentina, Turkey, Egypt, Nigeria, Lebanon and Pakistan.
As per a December 13 update by X platform user Tahini, on December 12, Bitcoin hit all-time highs against the Argentine peso at 15,176,100.12 ARS. The coin was also valued at 1,202,109.40 Turkish liras (TRY), 32,703,517.06 Nigerian nairas (NGN) and 1,280,955.47 Egyptian pounds (EGP).
In addition, the chart also revealed that BTC had reached new records against the Lebanese pound and the Pakistani rupee at 622,548,74.67 Lebanese pounds and 11,736,063.26 Pakistani rupees, respectively.
Bitcoin 2024 predictions
A senior analyst at Bitwise predicts Bitcoin could scale new heights, surpassing $80,000 by 2024. They believe the launch of the first spot Bitcoin ETF and the upcoming Bitcoin halving in April will further fuel price growth.
They also foresee stablecoins eclipsing Visa in terms of transaction volume, hailing these dollar-backed tokens as a “killer app” for the crypto space. These predictions hinge on their observation that stablecoin trading volume has already surpassed $5 trillion, even as Visa processed over $9 trillion in payments by Q3 2023.
Bitwise is one of the 13 financial institutions that applied for spot Bitcoin ETF approval from the SEC.
Other predictions for Bitcoin in 2024 are even more bullish. Bitcoin commentator Plan B forecasted an average Bitcoin price of at least $100,000 from 2024 to 2028, while BitQuant set a target price of roughly $250,000 after the 2024 halving. Some commentators have even speculated on the potential for Bitcoin to reach $1 million.
In addition, a new Financial Accounting Standards Board (FASB) rule allowing U.S. firms to reflect the value of their crypto holdings transparently could trigger another wave of Bitcoin and crypto mainstream adoption. This new set of rules will take effect in December 2024.
Bitcoin-only exchange Swan Bitcoin CEO Cory Klippsten mentioned that the rule change allows companies to treat Bitcoin as a “strategic financial asset.” This shift permits reporting on value gains and losses, a feature potentially boosting adoption by businesses.