Bitcoin surged above $45,000 for the first time since April 2022 on Tuesday, as the world’s largest cryptocurrency kicked out the New Year with a bang, spurred by hopes for the approval of exchange-traded spot bitcoin funds.

Bitcoin reached a 21-month high of $45,532 after gaining 156% last year, its best yearly performance since 2020. It was last up 2.5% at $45,318 but is still a long way from the record high of $69,000 set in November 2021.

On Tuesday, ether, the token linked to the ethereum blockchain network, was 1.45% higher at $2,386 after rising 91% in 2023.

The emphasis of investors has been fully on whether the US Securities and Exchange Commission would soon approve a spot bitcoin ETF, which would open up the bitcoin market to millions more investors and attract billions of dollars in investment.

In recent years, the Securities and Exchange Commission has denied many applications to launch spot bitcoin ETFs, alleging that the cryptocurrency market is susceptible to manipulation.

In recent months, however, there have been increasing indications that regulators are ready to approve at least part of the 13 proposed spot bitcoin ETFs, with a decision expected in early January.

However, if the green light is given, the obvious issue is whether we will see a buy-the-rumor, sell-on-fact scenario play out or whether it will promote another run higher.

Rising predictions that major central banks will lower interest rates this year have also been beneficial to cryptocurrencies, helping to dispel the pessimism that had crept over crypto markets following the demise of FTX and other crypto-businesses in 2022.

The crypto market is expected to rise significantly this year, with important impacting factors including the influx of investment capital from spot ETFs, the halving of Bitcoin, and more supportive monetary policy in the United States and globally.