Bitcoin, the world’s largest cryptocurrency, has soared past the $50,000 mark, marking a significant recovery since its slump below $40,000 following the introduction of spot ETFs. This surge comes as a validation of the ongoing bull market that commenced in January 2023, now entering the Fear of Missing Out (FOMO) phase.
Initially, the launch of spot ETFs on January 11 triggered a brief stumble in Bitcoin’s price, as investor focus shifted towards the outflow from the high-fee Grayscale Bitcoin Trust (GBTC). Consequently, Bitcoin’s value plummeted to as low as $38,500 shortly after the ETFs were launched.
Recent market dynamics, however, reveal a change in this pattern. While outflows from GBTC have slowed down, significant inflows have continued into the newly introduced ETFs. On February 8, Grayscale witnessed a reduction of just 1,850 bitcoin, whereas other ETFs amassed nearly 11,000 tokens. Subsequently, on February 9, Grayscale recorded a loss of 2,252 coins, while other ETFs added over 13,000, showcasing a shift in investor sentiment.
The crypto winter that ensued after Bitcoin peaked at approximately $69,000 in November 2021 was marked by significant downturns, including the collapse of the Terra ecosystem and the demise of crypto exchange FTX alongside its founder, Sam Bankman-Fried, in November 2022. By the end of 2022, Bitcoin closed at slightly above $16,000, registering a staggering 75% decline from its all-time high.
Throughout 2023, despite being hailed as a major bull market period for cryptocurrencies, Bitcoin’s price action remained subdued. However, the final quarter of 2023 witnessed growing optimism as the Securities and Exchange Commission (SEC) hinted at greenlighting spot Bitcoin ETFs in early 2024. Consequently, Bitcoin’s price surged by nearly 60% in the last three months of 2023, closing the year above $42,000.
This recent surge above $50,000 not only marks a milestone in Bitcoin’s recovery journey but also underscores renewed investor confidence in the cryptocurrency market amidst evolving regulatory landscapes and market dynamics.
Last Edited by – CS Web Desk on 13 Feb 2024 – 12:18 PM – GMT
