Bitcoin topped $42,000 as frenzied speculation in cryptocurrencies gathers pace, extending the largest digital token's rally to more than 150% this year.
The biggest cryptocurrency rose as much as 6.1% to reach $42,144 as of 11 a.m. on Monday in London.
Bitcoin was last at these levels in April 2022, before the TerraUSD stablecoin collapse that accelerated a $2 trillion rout in digital assets. It's on track for the biggest annual gain since 2020.
Smaller tokens such as Ether and meme-crowd favorite Dogecoin also pushed higher. Bitcoin Cash jumped 11% and a gauge of the largest 100 crypto coins added more than 5%.
The broad cryptocurrency advance came even as stock markets were mixed, with benchmarks in China and Hong Kong sliding.
Investors are increasingly convinced that the Federal Reserve is done with rate hikes as inflation cools, turning the focus to the likely extent of reductions in benchmark borrowing costs next year.
The changed backdrop has fueled a rally across global markets and has reignited speculative interest in digital assets.
"Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024," Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. Technical chart patterns point to $42,330 as the next level to watch for, he added.
The crypto industry is also awaiting the outcome of applications from the likes of BlackRock Inc. to start the first U.S. spot Bitcoin ETFs.
Bloomberg Intelligence expects a batch of these products to win Securities & Exchange Commission approval by January.
Bitcoin's revival from the 2022 crypto crash has weathered a US crackdown that put Sam Bankman-Fried behind bars for fraud at FTX and handed top crypto exchange Binance and its founder Changpeng Zhao rap sheets and big fines.
Optimists argue the push to curb dubious practices and the prospective ETFs signal a maturing crypto industry and the potential for a wider investor base.
Recent enforcement actions "have instilled confidence among investors," said Su Yen Chia, co-founder of the Asia Crypto Alliance. Bitcoin "is aping momentum in traditional finance with Fed rate-hike expectations fading," she added.
