Bitcoin climbed above $50,000 on Monday, marking its highest point since December 2021. Analysts believe it could continue rising to $52,000.
Bitcoin (BTC) surpassed $50,000 on Monday for the first time in over two years, driven by strong exchange-traded fund (ETF) inflows last week and increasing interest from institutional investors.
Earlier today, the largest cryptocurrency was trading around $48,000. It then surged to as high as $50,300 at the beginning of the U.S. trading session, reaching its highest price since December 2021. However, it faced resistance at the $50,000 level as sellers began to take profits, leading to a slowdown in the upward movement.
At present, BTC is trading slightly above $50,000, marking a nearly 4% increase over the past 24 hours. It has outperformed the broader CoinDesk 20 Index (CD20), which has risen by 3%. The CD20 is currently hovering around 1,871, just below its intraday all-time high of 1,875 on January 11.
Ether (ETH), the second largest cryptocurrency, saw the most significant gains among the CD20 index constituents. It surpassed $2,600 and rose by 5.5% after asset manager Franklin Templeton entered the competition for a spot-based ETH ETF on Monday. Last week, Austin Reid, head of revenue at institutional crypto exchange FalconX, observed a notable shift towards ETH among market participants in anticipation of a decision on the spot ETH ETF expected later this year.Well-known figures on Wall Street, such as BlackRock, the world’s largest asset manager, have proposed spot bitcoin ETFs. However, despite high anticipation for their launch, the price of bitcoin dropped by roughly 15% following the SEC’s approval.
The tokens of Ethereum layer 2 networks, such as Immutable X (IMX) and Optimism (OP), along with the token from the liquid staking platform Lido (LDO), surged in value due to Ethereum’s increase. IMX rose by 12%, OP by 9%, and LDO by 7%.
Newly approved bitcoin ETFs have drawn in approximately $3 billion in net flows, even as over $6 billion has been withdrawn from Grayscale’s product since its ETF debut.
As cryptocurrency options gain traction in traditional finance, issuers are hopeful that mainstream investors will begin to allocate a portion of their portfolios to products like bitcoin ETFs, alongside their traditional investments in stocks and bonds.
Bitcoin is aiming to reach $52,000.
Last week, spot bitcoin ETFs attracted over $1.1 billion in new funds, supporting Bitcoin’s price increase. This occurred alongside a slowdown in outflows from established funds like Grayscale Bitcoin Trust (GBTC) and ProShares’ futures-based ETF (BITO), according to asset management firm CoinShares. However, concerns arise from Genesis, a crypto lender under bankruptcy protection, planning to sell its $1.6 billion worth of GBTC holdings. This potential sell-off could impact ETF inflows and Bitcoin’s price in the coming months.
Macro analyst Noelle Acheson suggests that Bitcoin is currently being bought more because people expect China to inject money into its stock market to prevent it from falling further. Additionally, there’s a belief that in the future, even in developed countries, the value of money will decrease.
Noelle Acheson suggests that there isn’t a clear catalyst for Bitcoin’s recent movement. She believes it’s likely due to increased accumulation driven by the reasons mentioned earlier, along with ongoing efforts to raise awareness about Bitcoin through ETF marketing.
Markus Thielen from 10x Research mentioned on Monday that with Bitcoin surpassing $48,000, it could swiftly climb to $52,000, a target he had set earlier for mid-March.
The crypto industry is feeling optimistic after overcoming regulatory challenges and scandals. In November, Binance, the largest exchange, paid a $4.3 billion fine for money laundering and violating sanctions.
Bitcoin’s outlook is also positive because central banks may lower interest rates this year, making riskier investments more appealing. Additionally, in April, there will be an update to the bitcoin network that will slow down the creation of new bitcoins, potentially boosting bitcoin’s value further.