Daisy Watts
Feb 13, 2024
An undated image displaying a Bitcoin.—Pixabay
Bitcoin (BTC) has risen to the $50,000 mark for the first time in over two years.
The upsurge is reportedly driven by impending reduction in interest rates later this year and the approval of exchange-traded funds (ETFs) granted by the US Securities and Exchange Commission designed to track the value of the biggest cryptocurrency in the world.
Up till now this year, BTC has risen 16.3%. Meanwhile, it snapped the highest on Monday since Dec. 27, 2021. as it increased 4.96% on the day at $49,899, as mentioned in a Reuters report.
Read more: Bitcoin soars beyond $48K — Crypto market plunge follows suit
Antoni Trenchev, co-founder of crypto lending platform Nexo, said, "$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20% sell-off."
Joining in the gaining trend, crypto stocks also registered gains on Monday as crypto exchange Coinbase rose 4.9%, with crypto miners Riot Platforms and Marathon Digital ascending 10.8% and 11.9%, respectively. Likewise, shares of software firm MicroStrategy — a prominent bitcoin buyer— were up 10.2%.
Following in the footsteps of BTC, the second-largest cryptocurrency, Ether, was up 4.12% at $2,607.57.
While crypto traders are attempting to tap interest rate cuts' timeline by US Federal Reserve, global stock indexes also rose higher, with forecast presented by analysts and market experts hinting towards May to observe the beginning for rate cuts this year.
According to Matteo Greco, a research analyst at fintech investment firm Fineqia International, the recent surge in bitcoin's price "can be attributed to the increased inflow into BTC spot ETFs."
This marks a significant milestone for the cryptocurrency and the broader crypto industry, with the U.S. securities regulator approving the first U.S. spot bitcoin ETFs on January 10 after years of efforts to bring such a product to market. Bernstein analysts predict that investments in these new ETFs will gradually surpass $10 billion by 2024, while Standard Chartered analysts anticipate inflows of $50 billion to $100 billion this year alone.
Other analysts suggest that inflows could reach $55 billion over the next five years. Additionally, the market is closely watching seven pending applications for ETFs linked to the spot price of ether, with the U.S. SEC expected to make final decisions on some of these proposals by May.
