Bitcoin Surpasses $50k Threshold for the First Time in Over Two Years
Bitcoin Surpasses $50k Mark for the First Time in Over Two Years
Bitcoin reached the $50,000 milestone for the first time in more than two years, driven by expectations of upcoming interest rate cuts and recent regulatory approvals for U.S. exchange-traded funds (ETFs) tracking its price.
The cryptocurrency has surged by 16.3% this year, hitting its highest level since December 27, 2021, on Monday. At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96% for the day at $49,899, hovering around the $50,000 mark.
Antoni Trenchev, co-founder of crypto lending platform Nexo, remarked, “$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20% sell-off.
Crypto-related stocks also experienced gains on Monday, with Coinbase (COIN.O) up 4.9%, and crypto miners Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) rising by 10.8% and 11.9%, respectively. Shares of software firm MicroStrategy (MSTR.O), a notable bitcoin buyer, were up 10.2%. The price of ether, the second-largest cryptocurrency, also rose by 4.12% to $2,607.57.
Global stock indexes saw modest gains as traders anticipated cues on when the U.S. Federal Reserve might start cutting interest rates, with May being a potential starting point according to analysts and market expectations.
Matteo Greco, a research analyst at fintech investment firm Fineqia International, attributed bitcoin’s recent price surge to increased inflows into BTC spot ETFs. The approval of the first U.S. spot bitcoin ETFs by the U.S. securities regulator on January 10 marked a significant milestone for the cryptocurrency industry.
Greco highlighted a slowdown in outflows from Grayscale Investment’s Grayscale Bitcoin Trust (GBTC.P), which received SEC approval in January to convert to an ETF. Meanwhile, BTC spot ETFs saw a total net inflow of about $1.2 billion, the highest weekly inflow since their launch.
Analysts anticipate gradual growth in ETF flows, with estimates ranging from $10 billion by 2024 to $50-100 billion this year. Additionally, the market awaits the SEC’s final decision on pending applications for ETFs tied to the spot price of ether, with several proposals due for a decision by May.
Investors are also anticipating the next bitcoin “halving” expected in April, a process designed to slow the release of new bitcoins. Previous halvings have resulted in bitcoin rallies, with the most recent one occurring in 2020.
Ben Laidler, global markets strategist at eToro, emphasized the significance of these events, stating, “With [the] fourth bitcoin halving, a first Fed interest rate cut and potential ethereum spot ETF approval, all are significant for what is the smallest, youngest and most retail-dominated asset class.”
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