After more than two years, Bitcoin surpassed $50,000 for the first time thanks to a sharp increase in money flowing into ETFs, expectations of lower interest rates and the upcoming "halving".
Since late last year, the world's largest cryptocurrency has mostly traded below $45,000 a unit, moving sideways after a wave of ETFs were approved in the U.S. Bitcoin began to break above resistance at the end of last week.
After a day of trading around $48,000, this cryptocurrency increased sharply from late last night and surpassed the $50,000 mark just entering February 13. Up nearly 4% in 24 hours and up more than 16% since the beginning of the year, this is the highest price since the end of 2021. After that, the market price dropped but quickly regained the above mark. At one point, Bitcoin reached more than $50,314 per coin.
“$50,000 is a major milestone for Bitcoin after the launch of spot ETFs last month failed to generate a major rally and led to a 20% sell-off,” said Antoni Trenchev, co-founder of crypto lending platform Nexo.
CoinDesk attributes the surge to the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin trust. Over the past few weeks, outflows from GBTC have slowed, while large inflows have continued to pour into new products. On February 8, Grayscale lost just 1,850 Bitcoin, while nine other ETFs added nearly 11,000 tokens to their funds. On February 9, Grayscale lost 2,252 coins, while the other nine ETFs added more than 13,000 units. That’s a lot of money, considering the 900 new Bitcoins that are mined and released into the market every day.
In total, Bitcoin spot ETFs have completed their first 20 sessions, reaching $10 billion in assets under management (AUM). Bloomberg analyst Eric Balchunas said that inflows into these funds will increase in the coming months as firms complete their portfolio due diligence.
In addition, according to Reuters , cryptocurrencies are performing positively with global stock indexes. Financial investors generally believe that the US Federal Reserve (Fed) may start cutting interest rates this year. They expect May to be the starting point for a new monetary policy.
Investors are also eagerly awaiting the next Bitcoin “halving,” which is expected to take place in April. This is an event that occurs every four years and reduces the reward for miners by half. Bitcoin has rallied during the previous three halvings, the most recent in 2020.
Tieu Gu - Quynh Trang (according to CoinDesk , Reuters )
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