Bitcoin tops $50,000 for first time in 2 years

Author: Qin Jin, Carbon Chain Value

In the early morning of February 13, after two years, Bitcoin broke through the $50,000 mark for the first time. It reached a maximum of $50,363, a 24-hour increase of 3.53%. Set a new high since December 2021.

According to "Fortune", this rise is due to three aspects. The first is the inflow of funds into the Bitcoin ETF. In the first month of its launch, the Bitcoin ETF It received a net inflow of US$1.8 billion. Secondly, there are expectations for the Federal Reserve to cut interest rates. Previously, on February 4, Federal Reserve Chairman Powell stated that he would cut interest rates after March. Finally, there is the Bitcoin halving that will take place in April.

According to Bloomberg, the SEC’s approval of ETFs is not the main reason for Bitcoin’s rise, the main reason is the 10-year-old Grayscale Bitcoin There were more than $6 billion in outflows from the trust fund (GBTC), which had previously operated as a closed-end trust that locked up investor funds and now allowed investors to liquidate freely. The previous flight of GBTC funds helped push the price down to $39,505. Bitcoin has fallen by about 15% since the date of ETF approval.

But it is now clear that outflows are slowing and prices are recovering. In the weeks leading up to the trade, outflows averaged $500 million per day, but since January 26, outflows have been steadily declining. According to the latest data from Bloomberg, outflows totaled just $51.8 million on Friday, the lowest since the approval.

At the same time, the capital inflow of the other nine ETFs is accelerating. Last week, the cumulative net inflow was about 1.2 billion US dollars, almost the total inflow so far. half of. Analysts say this strong buying pressure is driving prices higher and is the main reason for the recent growth.

Jeff Kendrick, head of digital asset research at Standard Chartered Bank, previously said that if ETFs continue to flow in at this rate, approximately $1 billion will be added every week. Then Bitcoin will rise every day.

Marcus Thielen of 10x Research said that on top of that, the Federal Reserve has said it will cut interest rates in the spring, which "provides another source of support for Bitcoin prices." A reason for the rise." During periods of high interest rates, highly liquid, volatile and risky assets like Bitcoin tend to become less attractive.

At the same time, in the view of Dave Nadig, a financial futurist at VettaFi, Bitcoin’s rise is attributed to the rise in prices before the April halving. Optimism. The Bitcoin halving gave everyone a reason to pay attention to Bitcoin, and there was a mechanical reason for that: Bitcoin supply was declining.

In fact, according to the history of Bitcoin’s past halving cycles, a Bitcoin bull market followed the first four halving events. The first bull run occurred in November 2012, when BTC price was around $12. The most recent halving occurred in May 2020, when the BTC price was US$8,755, and it rushed towards US$69,000 in 2021.

According to CNBC, CoinShares research director James Butterfield said that demand for spot Bitcoin ETFs remains strong, with a net inflow of US$1.1 billion in the past week since its launch. Since then, net inflows have been US$2.8 billion. On Friday alone, the ETF gained 12,000 Bitcoins, significantly exceeding the daily rate of approximately 900 Bitcoins being added.

Investors have been eyeing key resistance around $48,600. Analysts say that if Bitcoin can hold above this level, it could reach a new high above $50,000 and possibly even an all-time high. Bitcoin hit a historical record of $68,982.20 on November 10, 2021.

Well-known investor Anthony Pompliano said on social media retail investors. The sophisticated crowd "likes speculation just as much, if not more." If retail investors like something, smart money will invest a lot of money.

We know that in 2022, Bitcoin’s price plummeted to $16,000 due to the breakup of FTX and the collapse of the Terra ecosystem, among other high-profile crashes. About 75%%.

In addition to plummeting prices and the collapse of large companies in the industry, layoffs and closures are also common trends in the entire industry, and this trend will continue until 2023.

According to Coindesk, although 2023 will be remembered as the starting point of the crypto bull market, Bitcoin price trends have been quite sluggish for most of the year. . On October 1, the price of Bitcoin was only $27,000, a rise of more than 65% in 2023, but considering Bitcoin’s historical highs, this is only a relatively small recovery.

In the last quarter of 2023, after years of delaying and rejecting attempts by Wall Street asset management giants to launch Bitcoin spot ETFs, the U.S. Securities and Exchange Commission finally The green light was given to Bitcoin ETFs in early 2024. The price of Bitcoin increased by nearly 60% in the last 3 months of 2023, closing at over $42,000.

According to "Fortune", in the past 12 months, driven by positive factors, Bitcoin has resumed its rise of approximately 129%. But it is below the all-time high of nearly $69,000 set in November 2021.