The cryptocurrency market has reached a significant milestone, surging to a valuation of $2 trillion for the first time in nearly two years, driven by optimism surrounding easing monetary policies, the emergence of spot bitcoin ETFs, and the upcoming bitcoin halving event.
In the past 24 hours, a collective surge in major tokens propelled the total market cap approximately 4.6% higher, marking a momentous achievement for the digital asset ecosystem.
Bitcoin, the flagship cryptocurrency, soared by 7% to reach $52,000, reclaiming its $1 trillion market cap. This price level has not been witnessed since December 2021, with bitcoin experiencing a remarkable gain of over 21% since the beginning of the year.
Ether, the second-largest cryptocurrency, Ethereum also witnessed a notable uptrend, climbing by about 5% to hit $2,740, a price level last seen in May 2022.
According to analytics firm CoinShares, digital asset investment products observed inflows of $1.1 billion last week, driving year-to-date flows to $2.7 billion. Notably, spot bitcoin ETFs attracted the majority of these inflows.
Analysts suggest that bitcoin’s price surge has positively influenced sentiments towards other cryptocurrencies like ether and Cardano, with smaller inflows also recorded for Avalanche and Polygon.
The increased demand for spot bitcoin ETFs comes after a subdued response in the initial weeks following regulatory approval. This surge in demand precedes the upcoming bitcoin halving event, which will halve the reward for bitcoin miners.
Michael Saylor, CEO of MicroStrategy and a prominent bitcoin advocate, emphasised the potential impact of the halving event in an interview with CNBC. He predicted strong gains for current bitcoin holders, citing historical trends where previous halving events were followed by all-time highs within the subsequent 12 months.
Saylor noted the significant demand for bitcoin through ETFs compared to the natural supply from miners, indicating a promising outlook for the cryptocurrency’s future.
