Bitcoin surpassed its recent gains on Friday, reaching its highest level since May 2022 and adding to its impressive yearly gain of over 130%. The cryptocurrency rose about 2.5% in the past 24 hours, settling around $38,676 on Friday afternoon. This surge in price comes as anticipation builds around the potential approval of bitcoin exchange-traded funds (ETFs).

Despite its remarkable performance this year, bitcoin still remains 44% below its all-time high in 2021. However, its continuous growth suggests a positive outlook for the cryptocurrency market. November saw an overall improvement in risk assets, with concerns easing regarding long-term Treasury yields and inflation, according to analysts at Grayscale Research.

In terms of volatility-adjusted performance, while bitcoin has outperformed numerous major assets in 2022, in November it underperformed long-term Treasurys and the S&P 500, gaining only 9% for the month. However, industry experts predict that bitcoin has the potential to trade between $36,000 and $40,000 by the end of the year if the macroeconomic environment remains stable and no significant positive developments, such as the approval of a Spot Bitcoin ETF or the adoption of bitcoin by a major corporation, sovereign-wealth fund, or nation-state occur.

Despite its upward trajectory, December historically poses volatility for bitcoin, as observed since its inception in 2009. Dow Jones Market Data shows that the cryptocurrency has risen in seven out of the 13 Decembers. Furthermore, in years when bitcoin gained over 100% through November, the digital asset experienced an average gain of 20% in December, rising in four out of the six instances.

While bitcoin's past years were marked by significant volatility, its recent performance indicates a more stable trend. With the potential for ETF approval and increased adoption by prominent entities, bitcoin remains a captivating asset and is poised to end the year on a strong note.