The price of bitcoin surged past the $45,000 mark, its highest since April 2022, on speculation that the US authorities are close to approving the first mainstream crypto-focused exchange-traded funds.

The digital currency was trading on Tuesday morning at $45,817, up by 3.6 per cent in the past 24 hours, though still far below the $69,000 it touched in November 2021.

The rally comes amid industry hopes that the US Securities and Exchange Commission will approve the first exchange-traded funds (ETFs) to reflect the bitcoin spot price.

BlackRock and Fidelity are among the mainstream asset management names to have applied in a move that could throw open the bitcoin market to millions and confer respectability on a currency still associated by many with money laundering and tax evasion.

The SEC has rejected multiple applications to launch spot bitcoin ETFs in recent years, arguing that the cryptocurrency market is vulnerable to manipulation and would-be ETF issuers would be unable to protect investors.

Speculators are also buying into bitcoin before the so-called halving, or halvening, in April — an event that comes around once every four years when the reward for mining new bitcoin is slashed, thus potentially reducing new supplies.

Growing expectations that the main central banks will cut interest rates this year have also been a boon for cryptocurrencies, helping to shake off the gloom that had settled over crypto-markets following the fraud at FTX and other crypto-business failures in 2022.

Thirteen applications to offer bitcoin-related ETFs have been put in to the SEC, with VanEck, Valkyrie Investments, Bitwise Investment Advisers, Invesco, WisdomTree Investments and a joint venture between Ark Invest and 21Shares also pitching to market the investments.

ETFs are liquid, easily tradeable investment vehicles already used by institutions and private investors to give themselves exposure to anything from the FTSE 100 to the price of crude oil. An SEC decision is expected within days.

The reaction to a possible rejection would be clear cut and likely lead to an immediate tumble in the bitcoin price, according to Chris Weston, head of research at Pepperstone. “However, should we see the green light, the obvious question is whether we get a ‘buy-the-rumour, sell-on-fact’ scenario playout or whether it promotes another leg higher,” he added in a note.

Ether, the digital coin linked to the ethereum blockchain network, was 1.45 per cent higher on Tuesday at $2,386, having risen by 91 per cent in 2023.

To date, the only cryptocurrency ETFs approved have been tied to futures contracts on bitcoin and ethereum, which are traded on the Chicago Mercantile Exchange.

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Bitcoin price breaks $45,000 barrier as US authority approval nears