Bitcoin breaks through $50,000 mark: highest since December 2021

Author: Zhao Yuhe; Source: Wall Street News

Thanks to the record-breaking debut of the Bitcoin spot ETF, the price of Bitcoin exceeded the US$50,000 mark on Monday and climbed to US$50,090, with an intraday increase of approximately 3.6 %, the highest point since December 2021.

US stocks The market has nine new spot Bitcoin ETFs that began trading on January 11 and have attracted more than $9 billion in investor inflows so far. Analysts say that two of the products, from BlackRock Inc. and Fidelity Investments, are the two Bitcoin spot ETFs that attract the most funds.

Institutional funds flowing into Bitcoin spot ETF assets continue to increase, analysts said. Shares of companies related to cryptocurrencies also rose, with MicroStrategy up 9.23% on Monday, Coinbase Global up 3.4.5%, and Marathon Digital jumping 12.16%.

The ETF craze triggered the recovery of Bitcoin last year. When the Bitcoin spot ETF started trading on January 11, the price of Bitcoin briefly exceeded US$49,000 that day, but Bitcoin plummeted in the following days. $10,000 as investors took profits and waited to see how the ETF performed. Another important reason is that Wall Street News previously mentioned that FTX sold 22 million shares of Grayscale Bitcoin Trust for nearly $1 billion, and FTX's GBTC ownership has dropped to zero.

Like many large cryptocurrency trading entities, FTX took advantage of the difference between the price of Grayscale Trust shares and the net asset value of the underlying Bitcoin in the fund. According to documents filed on November 3, 2023, as of October 25, 2023, FTX held 22.3 million GBTC, worth $597 million.

Bitcoin’s four-year halving, scheduled for April, has also caused optimism in the cryptocurrency community. The halving reduces the number of Bitcoins miners receive to operate the powerful computers that verify blockchain transactions. Based on past experience, this event is usually seen as a factor supporting prices.

Fundstrat Global Advisors wrote in a report that in addition to ETF inflows, sentiment toward Bitcoin during the Lunar New Year holiday currently underway in Asia is "generally positive."

However, the price of Bitcoin is still about $20,000 below the record high reached in 2021 during the epidemic-era bull market, which was driven by easy monetary policy.