- Bitcoin briefly surpassed $50,000 on Monday for the first time in over two years.
- Analysts are now monitoring whether it can sustain this level. Spot bit coin ETFs saw their highest net inflows since they began trading in January.
- A report from Grayscale highlights these ETF inflows and the upcoming bit coin halving as factors that could push prices higher.
- El Salvador's president, who supports Bitcoin, won re-election.
- The Solana network faced another outage, temporarily stopping decentralized applications on that blockchain.
On Monday, the price of Bitcoin (BTCUSD) surged past $50,000 for the first time since late 2021.
This surge was fueled by a robust bullish sentiment driven by inflows into Bit coin exchange-traded funds (ETFs), the excitement surrounding the upcoming halving, and the re-election of El Salvador's pro-Bitcoin president, Nayib Bukele.
Crypto Market Last Week
Bitcoin investors experienced a significant increase in value, with a roughly 15% rally in the past week, reaching $50,000 from below $43,000 by midday Monday.
While spot Bit coin ETFs played a significant role in this surge, they weren't the sole factor responsible for driving up prices.
Spot Bitcoin ETFs were performing well, gaining momentum.
Recently approved spot Bitcoin ETFs in the U.S. saw significant inflows last Friday, marking their second-highest day for incoming funds.
Approximately $540 million flowed into various Bit coin ETF offerings that day, with Thursday also showing strong numbers, with over $400 million in net inflows.
Despite over $150 million exiting Grayscale Bit coin Trust (GBTC) over the same two days, BlackRock's iShares Bit coin Trust (IBIT) attracted nearly half of all inflows during this period.
According to Eric Balchunas, a Senior ETF Analyst at Bloomberg, IBIT and Fidelity's Wise Origin Bitcoin Fund (FBTC) are the two largest ETFs in history in terms of assets held after just one month of existence.
Optimism surrounding the Bitcoin halving buoyed the price.
Strong inflows into spot Bitcoin ETFs, coupled with the anticipated Bit coin halving event set for midyear which will reduce the rewards for mining Bitcoin by half seem to be fueling the positive outlook in the cryptocurrency market overall, as stated in a report released last week by crypto investment firm Grayscale Advisors LLC.
The report suggested that the upcoming Bit coin halving event is different from previous ones and may not have entirely negative effects on Bitcoin miners.
Bitcoin Hits $50k Level for First Time in More than Two Years https://t.co/1iLgr0Lcti
— The Japan News (@The_Japan_News) February 13, 2024
Source: The Japan News
According to the report, while the reduction in block rewards presents a challenge, recent developments such as the growing use of ordinal inscriptions and Layer 2 projects within the Bit coin ecosystem offer promising solutions.
Ordinal inscriptions add more information to the serial numbers of each satoshi (the smallest unit of Bit coin), while Layer 2 projects aim to improve the processing speed of cryptocurrency blockchain networks.
"These advancements could benefit miners by potentially improving transaction throughput and increasing transaction fees for the network," stated the Grayscale report.
What To Expect From Crypto Markets This Week
This week, analysts will monitor how high Bitcoin can climb after surpassing a crucial price level on Monday.
Previously, the cryptocurrency encountered resistance below $50,000 in late March 2022 and earlier this year in January.
However, analysts at Bernstein anticipate a "FOMO" (fear-of-missing-out) rally in Bit coin. In other notable crypto news, the legal case between Craig Wright and the Crypto Open Patent Alliance (COPA) will continue in the UK.
Wright is accused of engaging in "industrial scale" forgeries in an effort to convince others that he is the creator of Bitcoin, Satoshi Nakamoto.
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