Bitcoin's longest rally since May has pushed the coin above $44,000, raising questions about whether the currency's surge increasingly reflects belief that the Federal Reserve will ease monetary policy.

The largest digital asset had posted six consecutive days of gains, up about 16%, as of Tuesday, before consolidating in early Asian trade on Wednesday. Since the cryptocurrency crash last year, the rebound in 2023 is 165%.

This rally is largely related to the possibility that the United States will allow the first spot Bitcoin exchange-traded fund (ETF), and Bitcoin may have a wider investor base. BlackRock and Fidelity are awaiting the outcome of their applications, with some analysts expecting approval in January.

But since June, asset management companies have begun applying to launch Bitcoin ETFs, and related topics have been surrounding Bitcoin. Some have wondered whether the coin’s recent surge is more related to bets that the Federal Reserve will cut interest rates next year.

IG Australia Pty market analyst Tony Sycamore said Bitcoin’s high volatility and surge were a reminder that cryptocurrencies are “more sensitive than other asset classes to Fed shifts and policies.”