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Bitcoin broke $50,000 for the first time since 2021. Here’s why and what’s next.

Published: February 12, 2024 at 3:02 pm ET

Bitcoin briefly traded above $50,000 on Monday for the first time since December 2021 as demand for recently launched spot Bitcoin ETFs remains robust.

According to data from CoinDesk, the largest cryptocurrency BTCUSD is up 13% in the last seven days. It is up 11% so far this year, building on a gain of more than 150% in 2023. However, Bitcoin is still around 28% below its all-time high of $68,990, reached in November 2021.

The…

Bitcoin briefly traded above $50,000 on Monday for the first time since December 2021 as demand for recently launched spot Bitcoin ETFs remains robust.

According to data from CoinDesk, the largest cryptocurrency BTCUSD is up 13% in the last seven days. It is up 11% so far this year, building on a gain of more than 150% in 2023. However, Bitcoin is still around 28% below its all-time high of $68,990, reached in November 2021.

According to Sean Farrell, head of digital asset strategy at Fundstrat, the recent rally appears to be driven by spot market demand, which has led to a significant increase in Bitcoin trading volume. “A significant portion of this volume will likely enter the market via spot ETFs chasing positive price action over the weekend,” Farrell wrote in a note Monday.

According to Mark Connors, head of research at digital asset manager 3iQ, outflows from Grayscale Bitcoin Trust GBTC, the largest spot Bitcoin ETF, have slowed while demand for competing Bitcoin ETFs remains robust.

Meanwhile, some investors are also looking to Bitcoin as a potential safe haven amid geopolitical uncertainty, Connors said.

“We have more than 60 major elections worldwide in 2024 in what is expected to be a volatile geopolitical environment,” said Thomas Perfumo, head of strategy at Kraken. “These challenges are driving the shift of capital to high-value stores of value like Bitcoin,” Perfumo wrote in emailed comments.

Nevertheless, Bitcoin’s price remains highly volatile compared to traditional stores of value such as gold, and many believe that there is still not enough evidence to support Bitcoin’s use as a safe haven asset.

What’s next

Connors is now targeting a range of $60,000 to $65,000 for the next Bitcoin level. He still expects the cryptocurrency to reach $160,000 by the end of 2024 and $350,000 by the second half of 2025.

Greg Magadini, director of derivatives at Amberdata, said he expects Bitcoin’s market cap to rise above $1 trillion this week. According to data from CoinMarketCap, the cryptocurrency’s market capitalization was around $977 billion as of Monday.

Source: www.marketwatch.com

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Robert Wilson

Business & economics analyst. Breaking down intricate financial trends for informed decision-making.

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