Bitcoin Surges Above $50,000, Triggering Crypto Rally
Bitcoin reached its highest price since December 2021 on Monday, surpassing the $50,000 level for the first time in over two years. This milestone triggered a rally not only for cryptocurrencies but also for related stocks. Coinbase stock and bitcoin exchange-traded funds (ETFs) experienced significant surges, as did bitcoin miner Marathon Digital (MARA).
During Monday afternoon trading, Bitcoin traded above $50,200, briefly reaching $50,314 in the morning. This marks the highest level for Bitcoin since December 2021. On January 11, Bitcoin had spiked to $49,000 on the day of the ETF launch but subsequently dropped back to its early December 2023 level before the SEC announcement. Nonetheless, Bitcoin has seen an increase of over 18% so far this year.
In the meantime, Ethereum reached four-week highs, hovering near $2,650. It has shown a 15% increase in value since the beginning of 2024.
Crypto exchange Coinbase (COIN) experienced a 3.8% surge on Monday, pushing it back above its 50-day moving average. Marathon Digital stock also saw a significant increase of 14.2%, approaching its late December highs.
Bitcoin ETFs experienced positive performance as well, with an increase of more than 5.5% during trading following a 4% gain on Friday.
According to BitMEX Research data, BlackRock's (BLK) iShares Bitcoin Trust (IBIT) has been the leading fund in terms of inflows since the launch of spot bitcoin ETFs on January 11, accumulating approximately $3.75 billion in inflows by the end of February 9. The Fidelity Wise Origin Bitcoin Fund (FBTC) ranks second with $3 billion in inflows. On Friday, the ARK 21Shares Bitcoin ETF (ARKB) surpassed the Bitwise Bitcoin ETF (BITB) in terms of inflows, with ARKB recording $918.5 million and BITB recording $785.8 million in total inflows as of February 9.
Grayscale Bitcoin Trust (GBTC) experienced outflows of about $6.38 billion as of February 9, although the rate of outflows has slowed down. Nevertheless, Grayscale remains the leader in terms of assets, managing $22.12 billion, followed by iShares Bitcoin Trust at $4.18 billion.
Despite the outflows from GBTC, the newly launched ETFs have accumulated $2.65 billion in inflows, according to BitMEX research.
Several trends are expected to impact Bitcoin in 2024, including the upcoming halving event in April and increased institutional participation resulting from the ETF launch.
According to Joel Kruger, market strategist at LMAX Group, mainstream adoption will be the most crucial factor moving forward. He believes that now that Bitcoin spot ETFs have been approved, traditional institutions will make more efforts to promote Bitcoin's value proposition.
Kyle DaCruz, Director of Digital Assets Products at VanEck, suggests that the full impact of institutional inflows has yet to be seen. VanEck launched its spot bitcoin ETF, the VanEck Bitcoin Trust (HODL), on January 11. HODL has accumulated more than $75.5 million in inflows since its launch and currently manages $161.7 million in assets, as of February 9, according to BitMEX.
DaCruz notes that many financial advisors do not yet have access to the ETFs because platforms often require thorough due diligence and other parameters that can take months to meet. However, he believes that once this changes, it will unlock the potential of the multitrillion-dollar financial advisor market.
