It seems that the beginning of 2024 has brought significant relief to the cryptocurrency market. On January 10, the market witnessed the much-anticipated approval of 11 spot Bitcoin (BTC) exchange-traded fund (ETF) applications. On February 13, the cryptocurrency crossed the $50,000 level for the first time since December 2021. “Bitcoin breaches the $50,000 milestone for the first time since 2021. I believe this surge is due to the performance of the US stock market, inflows into spot Bitcoin ETFs, and the upcoming halving event. Bitcoin should now face its next resistance at $50,250, leading towards the $51,200 mark. The prevailing investor sentiment can manifest into a bullish presence in the market,” Edul Patel, co-founder and CEO, Mudrex, a cryptocurrency investment platform, told FE TransformX.
For investors, things seemingly didn’t go as planned after the spot BTC ETF authorisation, with the cryptocurrency falling underneath the $40,000 mark. Despite everything, BTC has risen roughly 16.3% up to this point this year, with the cryptocurrency’s price rising by over 15% in the last week and by 16% in January. According to market experts, macroeconomic reasons which will bolster the market in the mid to long-term include the expected US Federal Reserve rate cuts and the emerging buzz around spot BTC ETFs. In 2024, the BTC Halving event, scheduled for April 2024, is anticipated to play a key role in driving BTC’s price, after the rewards allotted to BTC miners get reduced from 6.25 BTC to 3.125 BTC. “The total crypto market capitalisation has risen to $1.87 trillion with BTC crossing $50,000 for the first time in two years. As expected, BTC soared to $50,000 after holding and breaking above the $49,000 support. On the other hand, Ethereum is trying to break the $2,700 resistance which might be successful when BTC dominance decreases from the current 52%. There are approximately 60 days until the BTC Halving in April 2024, which could potentially push the cryptocurrency market to new highs,” Shivam Thakral, CEO, BuyUcoin, a digital asset exchange, highlighted.
As of February 13, 2024 (12.50 pm, Indian Standard Time), BTC price was trading at close to the $50,150 level, which showed a close to a four percent rise on a one-day basis, as per CoinMarketCap, a crypto price-tracking website. The website also mentioned that the BTC market capitalisation was closing in on the $985 billion mark, which showed an approximately four percent increase and managed a 24-hour volume of nearly $40 billion, which recorded a 97% rise. BTC’s price behaviour saw backing from the influx into spot BTC ETFs in the last seven days, which resulted in more than $1.1 billion worth of net gains, despite weak outflows from funds which included ProShares’ futures-based ETF (BITO) and Grayscale Bitcoin Trust (GBTC), as stated by CoinsShares, a digital asset management firm. The firm also specified how a likely selling pressure from Genesis, a cryptocurrency company, to ensure a $1.6 billion amount of GBTC holdings’ liquidation could impact the ETFs’ price timeline in upcoming months. In an official blog post, Markus Thielen, founder, 10x Research, a crypto investment firm, mentioned that BTC breaking above the $48,000 level suggests that it could even clock the $52,000 price.
“I think there is an expectation from the halving due to the inception of BTC spot ETFs, which has increased the demand for BTC as investments and has surged to a volume of over $50 billion in a month, since approval in mid-January 2024. If this demand continues, the BTC halving could mark the beginning of a new bull run for digital assets pushing BTC beyond any historic all-time highs. The presence of a regulated BTC ETF in the US has not only boosted the adoption of digital assets but has also acted as a template for developing economies to leverage the potential of digital assets,” Manhar Garegrat, country head – India and global partnerships, Liminal Custody Solutions, a digital asset custody and wallet infrastructure provider, concluded.
