Bitcoin (BTC) reached a milestone on Monday by surpassing $50,000, marking its highest recorded value since December 2021. This breakthrough comes amid a resurgence in the broader cryptocurrency market, accompanied by substantial liquidations totalling $191 million within the last 24 hours.
Data from Coinglass reveals that crypto shorts amounting to over $36 million were liquidated in the past hour alone. The overall liquidations throughout the day affected more than 57,000 traders, with the most significant liquidation observed in an ETH-USD swap on OKX, valued at $3.89 million.
Bitcoin has demonstrated a robust performance, exhibiting a 17% increase over the past seven days, while Ether (ETH) has risen by 13.5%. This recent rally marks a swift recovery from the market slump witnessed after the approval of several U.S. Bitcoin spot ETFs last month, initially prompting a surge to $49,000 before a subsequent drop below $40,000 in late January.
The turnaround in fortunes can be attributed to a combination of factors, including slowing outflows from the Grayscale Bitcoin Trust (GBTC) and a consistent influx of funds into newer spot ETFs. The market sentiment, previously dampened by a “sell the news” reaction, has now seen day 1 ETF buyers returning to positive territory.
Bitcoin briefly reached a high of $50,256 before retracing to $49,936 at the time of reporting. With a current market cap of $980 billion, it stands on the cusp of reaching the coveted $1 trillion mark, requiring a per-unit price of approximately $51,000.
Following a brief setback after the January 11 launch of spot ETFs, the ongoing Bitcoin bull market, which commenced in January 2023, has entered a phase of fear of missing out (FOMO). Despite the initial success of the new spot ETFs, investor attention shifted towards substantial outflows from the high-fee Grayscale Bitcoin Trust (GBTC), leading to a temporary drop in Bitcoin prices to as low as $38,500.
Recent weeks, however, have seen a reversal of this trend, with slowing outflows from GBTC and significant inflows into the newly established ETFs. On February 8, Grayscale shed a mere 1,850 bitcoin, while the other nine ETFs added almost 11,000 tokens to their portfolios. On February 9, Grayscale’s losses amounted to 2,252 coins, contrasted by the addition of over 13,000 coins by the other ETFs.
This surge in Bitcoin prices is a notable turnaround from the challenging period the cryptocurrency faced in 2022, with the market experiencing setbacks such as the collapse of the Terra ecosystem and FTX crypto exchange in November 2022. Bitcoin concluded 2022 at slightly above $16,000, witnessing a 75% decline from its all-time high. The subsequent year, 2023, witnessed a major bull market for the crypto industry, although Bitcoin’s performance was relatively subdued for most of the year, closing at just above $42,000.
The final quarter of 2023 brought renewed optimism as it became increasingly likely that the U.S. Securities and Exchange Commission (SEC) would approve spot Bitcoin ETFs in early 2024. Bitcoin’s value surged by nearly 60% in the last three months of 2023, closing the year above $42,000.
