Bitcoin has recently surged to surpass the $46,000 mark, marking its highest value in nearly a month. This upward momentum can be attributed to a consistent influx of cash into US exchange-traded funds (ETFs) that hold the digital currency. In the past nine consecutive trading sessions, these ETFs have seen steady inflows, outpacing outflows from the Grayscale Bitcoin Trust.
On Friday, Bitcoin rose by as much as 3%, reaching $46,7000. The resurgence in interest comes after a period of initial hesitation fueled by outflows from the Grayscale Bitcoin Trust. According to data compiled by Bloomberg, this shift in sentiment has been evident since the inception of ETF trading on January 12.
— Bitcoin Archive (@BTC_Archive) February 9, 2024
Caroline Mauron, co-founder of Orbit Markets, a digital-asset derivatives liquidity provider, commented on the situation, noting that Bitcoin’s upward trajectory is likely to continue as Grayscale outflows stabilize. Mauron also pointed out the increasing significance of the upcoming Bitcoin halving event, scheduled for April. This event, which occurs every four years, involves a reduction in the rewards given to miners for validating transactions, effectively halving the rate of Bitcoin production. This process is instrumental in maintaining the predetermined limit of 21 million tokens in circulation, with rewards decreasing from 6.25 to 3.125 coins per block.
The anticipation surrounding the Bitcoin halving, combined with the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) on January 10, has fueled significant interest in digital assets. This enthusiasm has been reflected in Bitcoin’s impressive performance, with the cryptocurrency recording a remarkable 160% increase in value throughout 2023, outperforming traditional assets like gold and stocks.
The approval of spot Bitcoin ETFs by the SEC has paved the way for various issuers to introduce these investment vehicles, offering investors new avenues to gain exposure to the cryptocurrency market. As Bitcoin continues to gain traction and investor confidence, it is poised to surpass the psychologically significant $50,000 mark in the near future.