The world of cryptocurrency has witnessed a significant milestone as the price of Bitcoin soared to an all-time high of $50,000 following the launch of a spot exchange-traded fund (ETF). This development has sparked an unprecedented surge in demand for the digital currency and has left many investors astounded.
The introduction of the spot ETF has revolutionized the way individuals can invest in Bitcoin. Unlike traditional ETFs that track futures contracts, spot ETFs allow investors to directly own and trade physical Bitcoins. This innovation has attracted a wide range of investors who were previously hesitant to enter the cryptocurrency market due to its complexity and volatility.
The industry’s flagship cryptocurrency has gained almost 15 per cent since the start of the year, largely driven by the US Securities and Exchange Commission reversing a decade-old policy to approve several spot bitcoin exchange traded funds, vehicles offering investors exposure to the price of bitcoin through a regulated product. Many of Wall Street’s biggest names have offered spot bitcoin ETFs, including BlackRock, the world’s largest asset manager. But despite widespread anticipation over their launch the price of bitcoin fell roughly 15 per cent in the days following the SEC’s approval.
Bitcoin first swept past the $50K mark at about 12:20 p.m. EST on Monday, according to CoinGecko, but its price recently settled just below that mark at $49,973, rising 3.6% over the last 24 hours and 17.1% over the last seven days. Its market cap stands at $981 billion.
Crypto exchange Bitfinex attributed bitcoin’s recent gains to the increase in total crypto asset inflows and a slowdown in the selling of Grayscale’s GBTC fund. Last week’s daily outflows from GBTC averaged under $100 million, compared to a high of over $600 million in late January, according to Bitfinex’s report.
“The diminishing selling pressure from GBTC is a key factor underpinning the robust performance of BTC prices this week,” Bitfinex wrote.
The sudden rise of the Bitcoin price in the past few hours was followed by a spike in crypto market liquidations to the sum of over $152 million, with the tally still increasing at the time of publication, according to data from Coinglass.
Bitcoin short position liquidations amounted to more than $45.56 million.
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