Bitcoin surpassed the $50,000 mark for the first time in over two years, driven by increased investments in exchange-traded funds supported by the digital currency. This surge was further fueled by anticipation of upcoming interest rate reductions and recent regulatory approvals for U.S. exchange-traded funds linked to Bitcoin’s value.
Bitcoin slipped slightly below the $50,000 threshold in early Tuesday trading, rising 3.9% to $49,971, while Ethereum, the second-largest cryptocurrency, saw a 6% increase to $2,649.
Due to increases in Bitcoin and other alternative cryptocurrencies, the total market capitalization of the global cryptocurrency market rose by 3.8% to approximately $1.87 trillion within the past 24 hours.
Bitcoin surpasses $50,000 for the first time since 2021. The surge is attributed to strong US stock market performance, increased investment in spot Bitcoin ETFs, and an upcoming halving event,” stated Edul Patel, CEO of Mudrex.
He added, “Bitcoin’s next hurdle is at $50,250, possibly leading to further gains above $51,200.
Shivam Thakral, CEO of BuyUcoin, commented, “Bitcoin’s rise to $50,000 was anticipated after surpassing the $49,000 support level. With around 60 days left until the Bitcoin Halving in April 2024, there’s potential for the cryptocurrency market to reach new peaks.”
“Macro factors like the expected US Fed rate cut and increasing adoption of Bitcoin ETFs will influence the market in the medium to long term. We may see Bitcoin testing its previous all-time high of $69,000 after the halving,” Thakral elaborated.
Solana, Avalanche, Toncoin, and Polygon rose by 5-7%, while XRP, Cardano, Dogecoin, Polkadot, and Shiba Inu gained 2-4%.
The DeFi volume stands at $6 billion, comprising 8.29% of the total crypto market volume, while stablecoins contribute $65.3 billion, representing 90.14% of the total market volume.
In the past day, Bitcoin’s market cap surged to $979 billion, with its dominance at 52.41%. Bitcoin’s 24-hour volume increased by 76.3% to $34.17 billion.
“Bitcoin hitting $50,000 marks a significant milestone after two years, delighting enthusiasts. With its value tripling since November 2022, it’s poised to reach $52,000 soon if it maintains current levels. However, a pullback is expected after hitting $52,000,” remarked Vikram Subburaj, CEO of Giottus.
Subburaj noted that market sentiment suggests Bitcoin might consolidate at present levels for a period, while altcoins show stronger performance.
Why has Bitcoin’s price surged?
Experts attribute the recent rise in Bitcoin’s price to increased investments in BTC spot ETFs.
The approval of the first US spot Bitcoin exchange-traded funds (ETFs) by the US securities regulator on January 10 marked a significant milestone for the cryptocurrency industry.
Experts note a slowdown in outflows from Grayscale Investment’s Grayscale Bitcoin Trust, which recently got approval from the U.S. Securities and Exchange Commission (SEC) to convert to an ETF. Conversely, BTC Spot ETFs witnessed a substantial net inflow of about $1.2 billion last week, the highest weekly inflow since their inception.
Analysts anticipate that investments into the new ETFs could hit $10 billion in 2024, with some projecting figures as high as $50 billion to $100 billion for this year alone.
The market is also eagerly awaiting SEC decisions on pending applications for ETFs linked to the spot price of ether, expected to be announced by May.
Investors are looking forward to Bitcoin’s upcoming “halving” in April, a process aimed at reducing the rate of Bitcoin issuance. Historically, such events have triggered price surges in Bitcoin, as seen in the most recent halving in 2020.
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