The world’s largest cryptocurrency has surged past $50,000, marking a significant recovery from its dip below $40,000 in the days following the launch of spot ETFs.
Since the introduction of spot ETFs on January 11, Bitcoin’s bullish trend, which began in January 2023, has transitioned into a phase of fear of missing out (FOMO), with its price breaching the $50,000 threshold for the first time in over two years.
Despite the initial surge in investments into the new spot ETFs, investor attention seemed to be drawn to the significant outflows from the high-fee Grayscale Bitcoin Trust (GBTC), leading to a drop in Bitcoin’s price to as low as $38,500 shortly after the ETFs commenced trading.
However, recent developments have shown a decline in outflows from GBTC, with substantial inflows into the new ETF products. On February 8, Grayscale reported a modest outflow of 1,850 bitcoins, while the other nine ETFs witnessed an addition of nearly 11,000 tokens to their portfolios. Similarly, on February 9, Grayscale experienced an outflow of 2,252 coins, while the other ETFs added over 13,000. To put this into perspective, only 900 newly mined bitcoins enter the market each day, a number set to decrease to 450 per day following the Bitcoin halving in April.
Is it the End of Crypto Winter?
Bitcoin reached its peak price of approximately $69,000 in November 2021. However, 2022 was marked by setbacks, including the collapse of the Terra ecosystem and the downfall of crypto exchange FTX and its founder, Sam Bankman-Fried, in November 2022. Bitcoin closed 2022 at just over $16,000, representing a 75% decrease from its all-time high.
Although 2023 saw a significant bull market for crypto, Bitcoin’s price movement remained relatively stagnant throughout the year. By October 1, Bitcoin was trading at $27,000, marking a modest recovery considering its previous high.
However, after years of delays, the final quarter of 2023 was characterized by growing optimism that the Securities and Exchange Commission (SEC) would finally approve spot Bitcoin ETFs in early 2024. Bitcoin’s price surged by nearly 60% in the last three months of 2023, closing the year above $42,000.
Source: Bitcoin Pushes Through $50K for First Time Since Late 2021
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