Bitcoin surged to $50,000, marking its highest point in over two years.
Since the beginning of last year, Bitcoin’s value has seen a threefold increase, rebounding from a significant 64% drop in 2022. The last instance Bitcoin reached the $50,000 milestone was in December 2021, though it still has not surpassed its peak of nearly $69,000 from November 2021.
This surge comes from a positive Bitcoin ETF market, as the new funds have attracted over $8 billion in inflows within just a month of trading. Despite Grayscale’s Bitcoin Trust experiencing large outflows throughout January, those withdrawals have stabilized, and spot Bitcoin ETFs currently hold around $2.8 billion in net assets.
This revival also aligns with a renewed appetite for risk among broader financial market investors, spurred by anticipations that the Federal Reserve may soon soften its monetary policy stance. Typically, the prospect of higher interest rates diminishes the appeal of riskier investments, including cryptocurrencies.
Bitcoin’s latest price achievement has effectively erased the losses it suffered following the collapse of the TerraUSD stablecoin in May 2022. This event triggered a domino effect of failures within the crypto industry, culminating in the downfall of Sam Bankman-Fried’s FTX exchange in November 2022.
With BTC reaching $50,000 again, there is greater optimism surrounding the largest cryptocurrency, especially with the next halving set to take place in April. A recent survey by crypto exchange BItget showed that 70% of investors globally intend to increase their crypto investments in 2024, and 84% expect BTC to surpass its all-time high this year.
Bitcoin’s price dynamics may be intriguing post-halving if such positive market sentiment remains strong.