Bitcoin briefly traded above $50,000 on Monday for the first time since December 2021 as demand for the recently launched spot Bitcoin ETFs remains robust.
The largest cryptocurrency BTCUSD,
rose 13% over the past seven days, according to CoinDesk data. It has climbed 11% so far this year, building on a gain of more than 150% in 2023. However, bitcoin is still down about 28% from its all-time high of $68,990 , reached in November 2021.
The latest rally appears to be driven by demand from the spot market, which has led to a significant increase in Bitcoin trading volume, according to Sean Farrell, head of digital asset strategy at Fundstrat. “A substantial portion of this volume will likely enter the market via spot ETFs, continuing the positive price action from the weekend,” Farrell wrote in a Monday note.
Grayscale Bitcoin Trust GBTC Releases,
the largest spot Bitcoin ETF, has slowed, while demand for competing Bitcoin ETFs remains robust, according to Mark Connors, head of research at digital asset manager 3iQ.
At the same time, some investors are also seeking bitcoin as a potential safe haven amid geopolitical uncertainty, Connors said.
“We will have more than 60 major elections around the world in 2024 in a potentially volatile geopolitical environment,” according to Thomas Perfumo, head of strategy at Kraken. “These challenges are driving the movement of capital toward high-quality store-of-value assets like Bitcoin,” Perfumo wrote in emailed comments.
Yet the price of bitcoin remains highly volatile compared to traditional store-of-value assets like gold, and many believe there is still not enough evidence that it can be used as a safe haven.
Connors now sees a range of $60,000 to $65,000 for Bitcoin’s next level. He still expects the crypto to reach up to $160,000 by the end of 2024 and $350,000 by the second half of 2025.
Greg Magadini, director of derivatives at Amberdata, said he expects bitcoin’s market cap to surpass $1 trillion this week. The crypto market capitalization stood at around $977 billion as of Monday, according to data from CoinMarketCap.
Gn En bus