Under 100 Words: A Compact Summary
Bitcoin’s market cap exceeded $1 trillion, rising 3% to $51,200, with a 19.5% weekly increase. Factors include the approval of Bitcoin ETFs, attracting $9 billion, and anticipation of the upcoming April halving. Positive market sentiment, coupled with potential US Fed rate cuts, fuels predictions of a new bull run surpassing previous all-time highs (Bitcoin Reclaims $1T Market Cap).
- On Wednesday, Bitcoin surpassed the $1 trillion market cap milestone, surging by 3% to exceed $51,200. Over the past week, Bitcoin witnessed a notable 19.5% increase, as reported by CoinMarketCap.
- The cryptocurrency had last traded at this level back in November 2021.
- Earlier in the month, the largest crypto token by market capitalization crossed the $50,000 threshold, marking a comeback from industry scandals and setbacks that had previously cast a shadow on the sector for over two years.
- Since January 2023, the token has experienced a value increase of over three times. Nevertheless, it remains significantly below its peak of $69,000 reached in November 2021.
- The surge in Bitcoin is primarily attributed to the approval and subsequent listing of Bitcoin spot exchange-traded funds (ETFs) in the US on January 11, as highlighted by experts. On that day, nine ETFs made their debut, and the long-standing Grayscale Bitcoin Trust transformed into an ETF.
- This move is expected to broaden the investor base for the cryptocurrency. According to Bloomberg, the newly introduced funds have garnered approximately $9 billion in investments.
- Ryan Lee, the chief analyst at Bitget Research, emphasized the impact of the approved Bitcoin ETF, noting that Bitcoin trading volumes surged from $16 billion to $50 billion between January 1 and January 10, representing a remarkable 300% increase.
- Another contributing factor to the surge is the anticipation of the upcoming Bitcoin halving scheduled for April this year.
- Bitcoin halving involves a reduction in the quantity of Bitcoin that miners receive for their efforts in operating powerful computers that verify transactions on the blockchain. This event is often considered a factor supporting prices, as per historical trends.
- According to Lee, the first Bitcoin halving took place in November 2012, leading to a substantial increase in Bitcoin’s price from $13 to $1,152 within one year.
- The peak was reached one year and one month after the halving. Similarly, the second halving occurred in July 2016, resulting in the price of Bitcoin surging from $664 to $17,760, with the peak reaching one year and five months after the halving.
- In May 2020, the third Bitcoin halving occurred, propelling the cryptocurrency’s price from a peak of $9,734 to $67,549 (April-November 2021), with the pinnacle reaching one year and six months after the halving. As the fourth halving approaches in the next 63 days, there is heightened anticipation.
- Shivam Thakral, the CEO at BuyUcoin, believes that alongside the imminent halving, the expected rate cuts by the US Federal Reserve during the same period, along with the increasing popularity of Bitcoin ETFs, could be significant macro factors driving the market in the mid to long term. Thakral anticipates that post-halving, Bitcoin may undergo a retest of its all-time high of $69,000.
- Manhar Garegrat, Country Head of India & Global Partnerships at Liminal Custody Solutions, stated, “Should this heightened demand persist, the Bitcoin halving might signal the commencement of a fresh bull run for digital assets, propelling Bitcoin beyond any previous historic all-time highs.”
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