Bitcoin Breaks Through $45,000. What’s Powering the Crypto Rally.

The key driver of the gains is the expected approval of Bitcoin exchange-traded funds by the Securities and Exchange Commission, a change that is expected to bring billions into the cryptocurrency market.

Reuters, citing sources familiar with the matter, reported that the SEC may notify potential issuers as soon as Tuesday or Wednesday that they have been cleared to launch Bitcoin ETFs the following week

Some analysts have estimated that the approval of ETFs could help bring another $600 billion into crypto funds in the next five years. However, analysts also have predicted that the approval will be a “sell the news” moment for Bitcoin itself after a steep rally over the past 12 months.

An additional potential tailwind is the expected Bitcoin ‘halving’ in April. Roughly every four years, the reward for mining Bitcoin via solving cryptographic puzzles that serve to validate transactions gets cut in half—a process that helps to limit token supply and arguably drive up prices.

“The Bitcoin halving is generally seen as a positive tailwind among crypto investors and has likely contributed to the recent rally…A look at the three previous Bitcoin halvings in 2020, 2016, and 2012 reveals that Bitcoin experienced a prolonged rally after each [one],” wrote Claudio Wewel, a currency strategist at asset manager J. Safra Sarasin, in a research note.

Beyond Bitcoin,
Ethereum
—the second-largest cryptocurrency—was rising 3.8% to $2,393. Among smaller cryptocurrencies,
Solana
jumped 8.2% and
Cardano
was up 3.1%.
Dogecoin
rose 2.3%.

Write to Adam Clark at [email protected]