- Bitcoin surpasses $57,000
- Spot ETFs drive demand
- Potential for new highs
Tuesday’s price of bitcoin surpassed $57,000 due to a record number of transactions involving spot exchange-traded funds that were recently introduced.
Bitcoin is currently trading at its highest dollar price since November 2021, assisting in the rally of other major cryptocurrencies, including Ethereum, whose price surpassed $3,000 on Tuesday, the highest since April 2022.
It follows a record day for bitcoin spot ETF trading volumes on Monday, assessed at $2.4 billion, with fund manager data indicating that Blackrock’s iBIT led the way with $1.3 billion.
Yesterday, Bitcoin spot ETFs amassed approximately 9,000 bitcoin, ten times the daily supply of new bitcoins introduced into circulation.
Spot ETFs Fuel Bitcoin Surge
Simon Peters, a market analyst at eToro, who stated, “The price movement appears to be driven by the recently approved bitcoin spot ETFs continuing to acquire bitcoin in significant quantities.”
“Since their inception, it spot ETFs have accumulated holdings exceeding 3 percent of the total bitcoin supply at present.” This significant achievement underscores an emerging pattern among institutional investors seeking to gain exposure to bitcoin.
‘I anticipate this trend to continue, and in the coming weeks, bitcoin’s price could potentially surpass $69,000, representing a new all-time high.’
Research analyst at Fineqia International, Matteo Greco, stated, “From my perspective, I maintain the belief that it is feasible to achieve additional highs in 2024.”
“The prevailing market trend is unmistakably bullish.” At present, the price of Bitcoin stands around 25 percent below its all-time maximum, which is not too far from its peak.
Furthermore, numerous traditional finance assets and indexes have already reached new highs in the first couple of months of 2024, suggesting robust momentum for risk-on assets as a whole and raising the possibility of additional peaks in 2024.
The largest cryptocurrency in the world has made substantial progress since reaching its all-time low of $16,000 in the aftermath of FTX’s collapse in 2022.
Bitcoin’s Bull Run and Halving Impact
It has experienced a 32% increase since the beginning of this year, with a notable 16.7% surge occurring within a span of seven days in February.
It fluctuated for the majority of 2023 between $20,000 and $30,000 before reaching $43,000 in December, awaiting the sanction of bitcoin spot ETFs by a US regulator.
Before the decision, it approached $48,000 for the first time in a year; however, it dropped to $38,000 afterward.
Peters further stated, “The block reward halving will take place in April of this year, reducing bitcoin’s inflation rate from approximately 1.75 percent to 0.87 percent. As a result, compared to the 1,314,000 bitcoin that have entered circulation in the previous four years, an estimated 657,000 bitcoin will enter circulation in the four years beginning in April.”
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“Historically, the halving has signalled the beginning of the subsequent its bull market, and price action has typically gone parabolic in the year that follows.”
Since the previous block reward halving in May 2020, the price of bitcoin has increased by 600 percent, reaching an all-time peak of $69,000 at present.
“Although I do not expect this time around to see as much of a percentage gain (since the percentage gain from halving to all-time high has historically decreased with each cycle), it is not inconceivable that the bull market could reach its pinnacle in the six figures.”
