Key Insights:
- Bitcoin’s market cap surpasses $1 trillion, driven by heightened demand fueled by U.S. spot bitcoin ETFs.
- Spot ETFs witnessed over $9.5 billion inflow, contributing to over 71% of new Bitcoin investments in the last two weeks.
- Investors eye the upcoming “halving” event in April, historically preceding Bitcoin’s attainment of new all-time highs.
Bitcoin has regained its status as a trillion-dollar asset, reaching a market capitalization exceeding $1 trillion for the first time since late 2021. This milestone aligns with Bitcoin’s resurgence, surpassing the $52,000 mark, a level not witnessed since December 2021.
As of this writing, Bitcoin is exchanging hands at $51,729.12, up by over 6% in the past 24 hours.
The cryptocurrency’s robust performance can be attributed to the success of U.S. spot bitcoin Exchange-Traded Funds, fostering a positive investor sentiment. These ETFs have gained traction, with a surge in demand leading to a substantial increase in Bitcoin’s market cap.
James Butterfill, Head of Research at CoinShares, highlighted the impact of newly launched spot ETFs on Bitcoin’s demand. “Yesterday, we saw $651 million [in] inflows, the largest daily inflow since the launch day,” Butterfill stated, emphasizing the changing dynamics of supply and demand.
US spot Bitcoin ETFs have just hit net inflows of US$4bn. Yesterday was the largest net inflows of US$651m since the launch day on 11th January. pic.twitter.com/uYk5Su7z7M
— James Butterfill (@jbutterfill) February 14, 2024
Spot ETFs Outshining Grayscale Bitcoin ETF (GBTC)
The shift in investor preferences is evident as over $9.5 billion has entered the bitcoin market through spot ETFs since their debut on January 11. Notably, the past two weeks have seen more than 71% of new investments in Bitcoin originating from these spot ETFs, excluding GBTC.
The diminishing outflows from GBTC have further fueled this upward trajectory. In contrast, spot ETFs are experiencing substantial inflows, surpassing the daily bitcoin production rate and emphasizing the growing demand for the cryptocurrency.
Anticipation Surrounding “Halving” Event
Bitcoin’s rally in 2023 and its subsequent dip after SEC approval of bitcoin ETFs set the stage for a new surge starting in late January. Investors are now eyeing the upcoming halving event in April, a supply-restricting occurrence that historically precedes Bitcoin achieving new all-time highs in the following months.
In conclusion, Bitcoin’s resurgence, fueled by the success of U.S. spot bitcoin ETFs, paints a promising picture for the cryptocurrency in 2024.
