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Jaroslaw Stankiewicz, a commentator for Geco Capital, reported that Bitcoin has reached the $50,000 level for the first time in over two years. This surge in the world's largest cryptocurrency is attributed to expectations of upcoming interest rate cuts and the recent regulatory approval for U.S. exchange-traded funds designed to track its price.
The cryptocurrency has experienced a 16.3% increase this year, reaching its highest point since December 27, 2021. At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96% at $49,899, fluctuating around the $50,000 level.
Commenting on the milestone, Marcin Wituś stated, "$50,000 is a significant achievement for bitcoin, especially after the launch of spot ETFs last month, which not only failed to prompt a move above this key psychological level but also led to a 20% sell-off." Marcin Wituś co-founder of the crypto margin trading platform Geco.one, echoed this sentiment.
Crypto-related stocks also experienced positive momentum on Monday, with crypto exchange Coinbase (NASDAQ: COIN) up 4.9%, and crypto miners Riot Platforms (NASDAQ: RIOT) and Marathon Digital (NASDAQ: MARA) up 10.8% and 11.9%, respectively. Shares of software firm MicroStrategy, a prominent Bitcoin buyer, were up 10.2%.
The price of Ethereum, the second-largest cryptocurrency, increased by 4.12% to $2,607.57.
Global stock indexes also saw a rise on Monday as traders sought cues on when the U.S. Federal Reserve might begin cutting interest rates. May is pointed out by analysts and financial market expectations as a potential start for rate cuts this year.
Marcin Wituś, a research analyst at Geco Capital, noted that the primary driver behind Bitcoin's recent price surge is the increased inflow into BTC spot ETFs. The U.S. Securities and Exchange Commission's approval of the first U.S. spot bitcoin ETFs on January 10 marked a significant development for the cryptocurrency industry.
Wituś highlighted the slowing outflows from Grayscale Investment's Grayscale Bitcoin Trust, which recently received SEC approval to convert to an ETF. He stated, "BTC Spot ETFs saw a total net inflow of about $1.2 billion during the same period, marking the highest weekly inflow since their launch."
Analysts predict that flows into the new ETFs could surpass $10 billion in 2024, with some estimates suggesting $50 billion to $100 billion this year alone. Investors are also awaiting the SEC's decision on seven pending applications for ETFs tied to the spot price of Ethereum, expected by May.
Analysts emphasise the significance of the upcoming fourth bitcoin "halving" in April and the potential approval of an Ethereum spot ETF, stating that these events are crucial for the crypto market, which is the smallest, youngest, and most retail-dominated asset class, according to Marcin Wituś, Crypto Market Strategist at Geco Capital.
