Last updated on May 18th, 2024 at 12:53 pm
Bitcoin, the largest cryptocurrency by market cap has surpassed $51k today, February 14 reaching a new high since December 2021. The rally has helped raise the global crypto market cap to 1.93 trillion, signifying a 3.5% increase in the last 24 hours.
The price of Bitcoin continues to surge, rising by over 4% in the last 24 hours and more than 20% in the past week. Bitcoin’s surge follows yesterday’s price drop to the $48,000 zone consequently liquidating more than $200 million position.
While this volatility highlights the increased risks associated with utilizing large leverage, it’s crucial to investigate some potential causes of the recent spike in Bitcoin’s price above $51,000.
Bitcoin halving on the horizon
Not insignificantly, the excitement surrounding the impending Bitcoin halving may have contributed to the recent general positive sentiment and not just today’s surge.
The reward for miners adding blocks to the network will be cut in half as a result of the halving event. This removes half of the supply of Bitcoin that is available for purchase, which might also lessen selling pressure.
According to conventional economic theory, an asset’s price should rise if its supply decreases and its demand either stays the same or rises. For Bitcoin, this has also always been the case for all prior halvings. Following the incident, there is always a significant bull run. It’s quite probable that investors are setting up for a future upswing.
Spot Bitcoin ETF impact
For the whole crypto market, the United States SEC approval of a spot Bitcoin ETF was a historic milestone. It happened earlier in January, and in the days that followed, there was a massive sell-off scenario that caused the price of Bitcoin to drop by more than 20%.
But with money flowing into the digital asset, the effects of a spot Bitcoin ETF might as well be beginning to materialize over the long run. According to data, on February 13th alone, more than $630 million was invested in Bitcoin ETFs. While GBTC is still losing money, interest in IBIT and FBTC is rising daily.
Coinstats data shows that Bitcoin is trading at $51,723. In addition, its 24-hour trading volume has spiked by 1.7% in the last 24 hours raising its volume to $41.4 billion.
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