“Bitcoin’s journey beyond 35K for Christmas could be a remarkable gift for crypto enthusiasts, and we might owe a part of this surge to the influence of Jerome Powell’s monetary policies, which have sparked renewed interest in decentralized financial solutions.”
Historically, the holiday season brings a Santa rally to equity markets, but this year could be different. With the United States Federal Reserve, Securities and Exchange Commission, and BlackRock all aligning to deliver positive news, we may see a significant rally in the coming weeks.
The Federal Open Market Committee recently decided to hold interest rates steady, bringing U.S. inflation down to 3.7%. However, concerns about higher rates triggering a recession remain. If the next Bureau of Labor Statistics inflation reading shows a downward trend, we can expect money to flood into risk assets, leading to a positive impact on equity and bond markets.
Crypto markets will likely follow suit, with Bitcoin remaining correlated to traditional markets. The approval of the first U.S.-based Bitcoin spot ETF, which is expected before January 10, will provide an additional boost. The rumors surrounding BlackRock’s application approval have already pushed Bitcoin back up to $35,000, a level not seen since 2022.
While the eventual approval of the ETF will be positive for cryptocurrencies, there might be a small dip before a sustained rally if investors follow the “buy the rumor, sell the fact” adage. However, the approval has the potential to be the greatest driver of crypto markets since the conditions created by the Covid pandemic.
Potential obstacles to an end-of-year rally include higher U.S. inflation and tensions between Israel and Palestine. However, the current direction suggests a positive outlook. Bitcoin has already seen significant growth this year, with its current level representing more than 100% growth year-on-year.
As we approach the end of the year, it is important to view Bitcoin and crypto markets with fresh eyes. Even without a Santa rally, we can celebrate the fact that crypto has survived another challenging year and is ending on a high note.
Lucas Kiely, chief investment officer of Yield App, reminds us to take this information as general knowledge and not legal or investment advice. The views expressed in this article are the author’s alone and do not necessarily reflect the views of Cointelegraph.