Bitcoin It hovered around $50,000 after touching the closely watched level for the first time in two years, a remarkable comeback from crypto scandals and wipeouts that cast doubt on the industry’s viability.
The largest digital asset rose as high as $50,328 in the US on Monday and was trading at $49,980 as of 7:40 am Tuesday in Singapore. Its value has tripled since the beginning of last year after falling 64% in 2022. Bitcoin remains below its all-time high of around $69,000 achieved in November 2021.
The wild price fluctuations seen since Bitcoin’s introduction more than a decade ago have long been one of the main attractions for speculators. While originally promoted as an alternative to the traditional financial system, the latest rally is driven by optimism that last month’s US approval of spot Bitcoin exchange-traded funds is leading to more mainstream acceptance.
“There’s a lot of buzz about money flowing into this asset,” said Matt Maley, chief market strategist at Miller Tabak & Co. “I would also note that the speed players are getting excited as well.”
The resurgence in crypto prices comes as expectations of loose monetary policy sap the attractiveness of riskier assets. “Risk appetite has carried over to digital assets as well,” said Chris Newhouse, DeFi analyst at Cumberland Labs.
Shares of crypto-related companies also rose Monday, with bitcoin proxy MicroStrategy Inc rising 11%, trading platform Coinbase Global Inc rising 3.8% and miner Marathon Digital Holdings Inc rising 14.2%. Positive sentiment may be spreading across Asian stocks related to digital assets.
Bitcoin has recouped all its losses since the stablecoin implosion in May 2022 terausdWhich triggered a wave of failures that ultimately helped bring down Sam Bankman-Fried’s FTX exchange in November 2022.
By the time FTX went down, the crypto market was already months into a decline that also affected hedge fund Three Arrows Capital and lender Celsius Network. But the decline of FTX, once one of the top crypto exchanges by trading volume, was even more damaging, with token prices stagnating as liquidity dried up.
Now that Bankman-Fried has been convicted of fraud, and Binance exchange co-founder Changpeng Zhao awaits sentencing for violating US sanctions and failing to enforce anti-money laundering policies, crypto prices are headed higher. as analysts see fewer risks to the industry.
etf flows
Nine U.S. spot bitcoin exchange-traded funds launched on Jan. 11, while the more than decade-old Grayscale Bitcoin Trust converted to an ETF the same day. The reach of the ETF promises to broaden the investor base for the token. The new fund has attracted nearly $9 billion so far, while outflows from the Grayscale fund appear to be slowing by more than $6 billion since its conversion.
“Enthusiastic buyers bring in more enthusiastic buyers, which pushes prices higher,” said Fadi Aboulfa, head of research at crypto-custodian Copper Technologies Ltd. The cryptocurrency has gained momentum after several green weeks and has a huge potential for further upside. When weekly market movements are seen above 10% (as we saw last week).
Optimism about the quadrennial Bitcoin cut taking place in April is also filtering into crypto. Halving reduces the amount of Bitcoin that miners receive for operating the powerful computers that verify transactions on the blockchain. This phenomenon is often seen as supporting prices based on historical precedent.
Fundstrat Global Advisors wrote in a note that apart from ETF inflows, sentiment towards Bitcoin is “generally positive” during the Lunar New Year holidays, which are currently underway in Asia.
The largest digital asset rose as high as $50,328 in the US on Monday and was trading at $49,980 as of 7:40 am Tuesday in Singapore. Its value has tripled since the beginning of last year after falling 64% in 2022. Bitcoin remains below its all-time high of around $69,000 achieved in November 2021.
The wild price fluctuations seen since Bitcoin’s introduction more than a decade ago have long been one of the main attractions for speculators. While originally promoted as an alternative to the traditional financial system, the latest rally is driven by optimism that last month’s US approval of spot Bitcoin exchange-traded funds is leading to more mainstream acceptance.
“There’s a lot of buzz about money flowing into this asset,” said Matt Maley, chief market strategist at Miller Tabak & Co. “I would also note that the speed players are getting excited as well.”
The resurgence in crypto prices comes as expectations of loose monetary policy sap the attractiveness of riskier assets. “Risk appetite has carried over to digital assets as well,” said Chris Newhouse, DeFi analyst at Cumberland Labs.
Shares of crypto-related companies also rose Monday, with bitcoin proxy MicroStrategy Inc rising 11%, trading platform Coinbase Global Inc rising 3.8% and miner Marathon Digital Holdings Inc rising 14.2%. Positive sentiment may be spreading across Asian stocks related to digital assets.
Bitcoin has recouped all its losses since the stablecoin implosion in May 2022 terausdWhich triggered a wave of failures that ultimately helped bring down Sam Bankman-Fried’s FTX exchange in November 2022.
By the time FTX went down, the crypto market was already months into a decline that also affected hedge fund Three Arrows Capital and lender Celsius Network. But the decline of FTX, once one of the top crypto exchanges by trading volume, was even more damaging, with token prices stagnating as liquidity dried up.
Now that Bankman-Fried has been convicted of fraud, and Binance exchange co-founder Changpeng Zhao awaits sentencing for violating US sanctions and failing to enforce anti-money laundering policies, crypto prices are headed higher. as analysts see fewer risks to the industry.
etf flows
Nine U.S. spot bitcoin exchange-traded funds launched on Jan. 11, while the more than decade-old Grayscale Bitcoin Trust converted to an ETF the same day. The reach of the ETF promises to broaden the investor base for the token. The new fund has attracted nearly $9 billion so far, while outflows from the Grayscale fund appear to be slowing by more than $6 billion since its conversion.
“Enthusiastic buyers bring in more enthusiastic buyers, which pushes prices higher,” said Fadi Aboulfa, head of research at crypto-custodian Copper Technologies Ltd. The cryptocurrency has gained momentum after several green weeks and has a huge potential for further upside. When weekly market movements are seen above 10% (as we saw last week).
Optimism about the quadrennial Bitcoin cut taking place in April is also filtering into crypto. Halving reduces the amount of Bitcoin that miners receive for operating the powerful computers that verify transactions on the blockchain. This phenomenon is often seen as supporting prices based on historical precedent.
Fundstrat Global Advisors wrote in a note that apart from ETF inflows, sentiment towards Bitcoin is “generally positive” during the Lunar New Year holidays, which are currently underway in Asia.
