Bitcoin has surged past the $50,000 mark, marking its highest level since 2021. This surge highlights a significant shift in investor interest, largely attributed to the introduction of mainstream bitcoin investment funds.
The cryptocurrency market has experienced significant growth, with Bitcoin gaining nearly 15% since the start of the year. This growth is largely attributed to the US Securities and Exchange Commission's approval of several spot bitcoin exchange-traded funds (ETFs), which offer investors regulated exposure to bitcoin's price, alongside anticipated interest rate cuts from the U.S. Federal Reserve.
The cryptocurrency is currently within $19,000 of its record peak of $68,789.63, which was achieved on November 10, 2021. Meanwhile, Ether, the second-largest cryptocurrency, experienced a notable surge, rising by over 4% to $2,607.57.
Analysts indicate that investors are eagerly anticipating the next bitcoin "halving," which is anticipated to take place in April.
"Bitcoin halving in April could lift prices," noted Taimur Baig, Chief Economist at DBS.
"Bitcoin has historically outperformed in the year after a halving event, which happens around once every four years. The next halving is expected in April this year, where rewards for mining a block will fall by half to 3.125BTC. Lesser reward implies a need for higher prices to sustain miner interest," he added.
Global stock indexes also saw slight gains as investors sought insights into potential interest rate cuts by the U.S. Federal Reserve. Analysts and financial market expectations suggest that rate adjustments may begin as early as May.
CoinShares data revealed that the newly approved bitcoin ETFs have attracted approximately $3 billion in net flows. This is despite the fact that over $6 billion was withdrawn from Grayscale's product since its conversion to an ETF, as reported by the Financial Times.
By City AM
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