Bitcoin Reaches AU$76,500 (US$50,000) Milestone

Posted on 13/02/2024 | 365 Views

For the first time in over two years, Bitcoin soared to the AU$76,500 (US$50,000) mark, fuelled by anticipations of interest rate reductions later in the year and the recent regulatory approval for U.S. exchange-traded funds (ETFs). This year has witnessed a significant surge in the cryptocurrency, climbing 22.16% and reaching its highest price level since December 27, 2021. 

Antoni Trenchev, co-founder of the crypto lending platform Nexo, highlighted the importance of this breakthrough, "US$50,000 marks a crucial milestone for Bitcoin, especially after the introduction of spot ETFs last month, which, contrary to expectations, precipitated a 20% downturn instead of surpassing this pivotal level."

Cryptocurrency-related stocks also saw a rise, with MicroStrategy, known for its substantial Bitcoin investments, saw its shares surge by 10.2%. Ethereum, ranking second in the crypto market, also rose by 4.12%, reaching AU$3,984.59 (US$2,607.57).

This uptick coincides with a slight increase in global stock indexes, as traders speculate on the timing of the U.S. Federal Reserve's rate cuts, with many pointing to May as the potential commencement.

The surge in Bitcoin's price is largely attributed to the growing investments into BTC spot ETFs, as observed by Matteo Greco, a research analyst at fintech investment firm Fineqia International. "The significant uptick in Bitcoin's value can be linked to the heightened inflows into BTC spot ETFs," Greco noted in his analysis.

On January 10, the U.S. securities regulator greenlit the country's inaugural spot Bitcoin ETFs, marking a pivotal moment for the cryptocurrency and the broader crypto sector, which had been endeavouring to launch such a product for over a decade. Greco also noted a slowdown in outflows from Grayscale Investment's Grayscale Bitcoin Trust which transitioned to an ETF with SEC's nod in January.

"While GBTC experienced a notable outflow reduction last week, BTC Spot ETFs witnessed their highest weekly inflow since inception, amounting to approximately US$1.2 billion (AU$1.83 billion)," he added.

Bernstein analysts forecast that these new ETFs might accumulate over AU$15.3 billion (US$10 billion) in 2024, while Standard Chartered analysts project between AU$76.5 billion to AU$153 billion (US$50 billion to US$100 billion) in inflows this year alone. Other projections suggest up to AU$84.15 billion (US$55 billion) over five years.

With several ETH spot price ETF applications still under SEC review and a decision expected by May, alongside the anticipation for Bitcoin's fourth "halving" in April, the crypto market is poised for significant events. With Bitcoin's forthcoming halving, the initial Federal Reserve rate cut, and the potential approval of Ethereum spot ETFs, we are at a pivotal moment for what is still a nascent and largely retail-driven asset class.


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