Bitcoin Nears All-Time High as Demand Soars: ETFs Fuel Market Optimism
Summary:
Bitcoin's price is nearing an all-time high of $69,000, with discussions targeting its performance after new record highs. Previously, in March 2013, Bitcoin's value doubled in a 10-day span, and a similar trend was noted in December 2020. Additionally, the anticipation of the next halving event in 2024 is creating a buzz in the cryptosphere. The Crypto Fear & Greed Index shows Bitcoin at its highest score since February 2021, indicating high market optimism. More notably, the recent launch of Bitcoin ETFs in the United States is driving unprecedented demand for the cryptocurrency, with predictions for an influx of institutional capital once major financial institutions start offering ETF trades. Currently, Bitcoin ranks as the ninth largest asset by market capitalization.
Bitcoin has recently been in the spotlight due to its skyrocketing price, which is rapidly nearing a fresh record of $69,000. As of the time of reporting, the cost of the digital currency is around $68,300, an increase of 7% over the last day, according to CoinGecko. Much of the conversation has been centered on the digital asset's performance following new record highs.
In March 2013, Bitcoin saw a 158% bump, going from $34 to $88 in a single month. This jump included a ten-day period in which the price doubled, analyst Dylan LeClair noted. By November 2013, the cryptocurrency had jumped from $200 to $1000 upon exceeding its past all-time high established a month earlier. CoinGecko data shows a similar trend in December 2020, when the coin doubled its previous record of $19,665 in just 23 days, followed by a rally that peaked at $63,580 in April 2021 — a three-fold or 222% rise in 120 days.
The halving event from May 2020 augmented the price spike later in 2020. However, Bitcoin is already nearing its all-time high more than a month before the 2024 scheduled halving. Jaran Mellerud, co-founder and chief strategist at HashLabs Mining believes that Bitcoin is likely to see a massive surge a few months after the upcoming halving, which is slated for April 20, 2024.
Bitcoin's score on the Crypto Fear & Greed Index stands at 90 out of 100 — the highest score since February 2021. Google searches for "Bitcoin" have also seen an uptick over the last fortnight as the price soared beyond the $50,000 and $60,000 marks. It's important to note that extreme greed can usually signal an impending market correction.
Unlike previous bull markets, the demand for Bitcoin is being propelled by the newly launched spot Bitcoin exchange-traded funds (ETFs) in the United States, with net inflows of $7.35 billion recorded since January 11th. BlackRock’s iShares Bitcoin Trust (IBIT) achieved the fastest $10 billion asset milestone in U.S. ETF history last week. Ric Delman, a U.S. investor, has projected that the inflow into Bitcoin ETFs will hit at least $150 billion by the end of 2025.
Additionally, Bitwise's chief investment officer, Matt Hougan, predicts an even greater flood of institutional capital once major financial institutions begin offering Bitcoin ETF trades. He also notes that the ratio of Bitcoin bought by ETF issuers to Bitcoin mined can reach over 10, a clear indication of the market's high demand for Bitcoin relative to its supply.
Presently, Bitcoin is the ninth largest asset by market capitalization and is just shy of surpassing Silver, which has a market cap of $1.356 trillion. When compared to the valuations of state-issued currencies, Bitcoin has recently edged out the Swiss franc to take the 13th spot.
Published At
3/5/2024 6:55:13 AM
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