Bitcoin has surged past the $50,000 mark for the first time in over two years, fueled by anticipation of potential interest rate cuts.
The world’s largest cryptocurrency has witnessed a remarkable 16.3% surge since the beginning of the year, reaching its highest point since December 27, 2021.
As of 12:56 p.m. EST (1756 GMT), Bitcoin was trading at $49,899, marking a 4.96% increase for the day.
According to Antoni Trenchev, co-founder of crypto lending platform Nexo, the $50,000 milestone is particularly significant following the launch of spot ETFs last month, which initially failed to push Bitcoin above this key psychological level and even triggered a 20% sell-off.
Positive sentiment
The positive sentiment surrounding Bitcoin has also spilled over to crypto-related stocks, with industry players like Coinbase, Riot Platforms, Marathon Digital, and MicroStrategy witnessing notable gains on Monday.
Meanwhile, the price of Ether, the second-largest cryptocurrency, has also seen an uptick, rising by 4.12% to reach $2,607.57.
The recent surge in Bitcoin’s price can be attributed primarily to the increased inflow into BTC spot ETFs, according to Matteo Greco, a research analyst at fintech investment firm Fineqia International.
The approval of the first U.S. spot Bitcoin ETFs by the U.S. securities regulator in January has been a significant development for the cryptocurrency industry, attracting substantial investor interest.
Net inflow
Greco highlighted a slowdown in outflows from Grayscale Investment’s Grayscale Bitcoin Trust following the approval of its conversion to an ETF, coupled with a significant net inflow of about $1.2 billion into BTC spot ETFs last week, the highest since their launch.
Analysts predict that flows into these new ETFs could reach significant levels, with estimates ranging from $10 billion to $100 billion in 2024 alone.
The market is also eagerly awaiting decisions from the U.S. Securities and Exchange Commission on pending applications for ETFs tied to the spot price of Ether, with expectations for several approvals by May.
