The Bitcoin rate rose above $51 thousand for the first time in more than four years, and its capitalization increased to $1 trillion. The first cryptocurrency has updated its 2024 maximum, reached exactly a month ago, writes RBC Crypto.
The previous time BTC traded at this level was at the end of 2021, when the cryptocurrency market entered a correction after reaching a historical high of $69 thousand. Since the beginning of 2023, the cost of the first cryptocurrency has almost tripled.
While Bitcoin was initially promoted as an alternative to the traditional financial system, the rise now comes amid optimism that the US approval of Bitcoin-based exchange-traded funds (ETFs) will lead to wider acceptance of cryptocurrencies in traditional financial markets.
Demand for Bitcoin-based exchange-traded funds continues to grow. Assets under management of Bitcoin ETFs exceeded 693 thousand bitcoins worth $35.7 billion, and the influx of funds into Bitcoin ETFs is consistently increasing and on February 13 reached a record $631 million. The record holder for the influx of funds was the Bitcoin ETF iShares Bitcoin Trust (IBIT), the largest in world of asset manager BlackRock.
One of the key factors in the current growth of Bitcoin is the increase in demand from institutional investors, as well as technical signals, explains BitRiver financial analyst Vladislav Antonov. According to technical signals, the immediate growth target for BTC is $52 thousand. The correction, according to his assessment, has already taken place, it went exactly on time and fit into the predicted levels. Now nothing distracts buyers from the rally. Next, the market will focus on the range of $54–55 thousand, the analyst believes.
Possible scenarios
Bitcoin's growth is fueled, among other things, by investors' hopes for the upcoming halving. In mid-April 2024, the reward to Bitcoin miners for a completed block of transactions is scheduled to be halved. This change is generally seen as a harbinger of a bullish period for the crypto market, with several halvings in the past followed by a steady rise in Bitcoin's price.
The cyclical nature of BTC’s behavior suggests that this time, halving the Bitcoin mining speed will cause the cryptocurrency to grow. In 2024, the coin found itself in a unique position. Halving will create a major shortage of Bitcoin in the market, and issuers of spot Bitcoin ETFs can significantly increase it. The formation of a trend is already indicated by a decrease in the volume of BTC available for purchase on the market, notes Nikita Vassev, founder of TerraCrypto.
Source: Cryptocurrency
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