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**Bitcoin Hits 21-Month High Amidst Optimism around Spot Bitcoin ETF Approval**

SINGAPORE (Reuters) – Bitcoin surged above $45,000 on Tuesday, reaching its highest level since April 2022, with the world’s largest cryptocurrency starting the New Year on a positive note driven by optimism regarding the potential approval of exchange-traded spot bitcoin funds.

Bitcoin hit a 21-month high of $45,532, marking a 156% gain in 2023, in what was its strongest annual performance since 2020. The cryptocurrency was last up 3.5% at $45,727, although it still remains significantly lower than its peak of $69,000 in November 2021.

Similarly, Ether, the coin associated with the ethereum blockchain network, also experienced a 2.6% increase on Tuesday, reaching $2,414. This follows a surge of 91% in 2023.

These upward movements in cryptocurrency prices have had a positive impact on crypto-related stocks, which closely track bitcoin prices. Companies such as Riot Platforms, Marathon Digital, CleanSpark, U.S. crypto exchange Coinbase, and software firm MicroStrategy saw gains ranging from 6.3% to 14.8% in premarket trading.

Investor attention has been largely focused on whether the U.S. securities regulator will approve a spot bitcoin ETF, which could open up the market to a wider investor base and attract billions in investments. The U.S. Securities and Exchange Commission (SEC) has previously rejected multiple applications to launch spot bitcoin ETFs, citing concerns about market vulnerability to manipulation.

However, recent signs suggest regulators may be ready to approve at least some of the 13 proposed spot bitcoin ETFs. Expectations are high that a decision will be made in early January.

The reaction to a potential rejection of the ETF would likely result in an immediate decline, according to Chris Weston, head of research at Pepperstone. On the other hand, if approval is granted, it remains to be seen whether it would lead to a ‘buy-the-rumor, sell-on-fact’ scenario or trigger another surge in prices.

In addition to ETF approval speculation, the prospect of major central banks lowering interest rates this year has contributed to the positive sentiment surrounding cryptocurrencies. This has helped lift the cloud of gloom that had been cast over crypto markets following the collapse of FTX and other crypto-business failures in 2022.

Looking ahead, cryptocurrencies could continue their upward trajectory in 2024, especially as historical patterns indicate that bitcoin tends to perform well during U.S. election years and in conjunction with Bitcoin halving cycles in 2012, 2016, and 2020.

The AI legalese decoder can be an invaluable tool for investors and cryptocurrency enthusiasts who are closely following the developments around spot bitcoin ETF approvals. By leveraging AI technology, the legalese decoder can efficiently process and interpret the legal jargon and regulatory language surrounding ETF applications and approvals, providing clear and concise insights to help users stay informed and ahead of market trends. This can help investors make informed decisions and navigate the complexities of the evolving regulatory landscape, ultimately contributing to their investment strategies and risk management practices.

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