Bitcoin, the world’s premier cryptocurrency, is on the verge of surpassing its highest valuation to date, as it breached the $67,500 mark on Monday, marking a significant milestone in its remarkable resurgence.
An Illustration of Bitcoin, the Pioneering Digital Currency, in Paris Bitcoin has been ablaze with activity throughout 2024.
Bitcoin’s KEY HIGHLIGHTS
Bitcoin experienced a substantial increase of approximately 6%, reaching over $67,500 by early afternoon, marking its highest point since November 10, 2021.
The cryptocurrency is presently only about 2% away from its record peak of nearly $69,000, achieved during a brief spike in 2021. This notable surge appears feasible, given that Bitcoin, known for its volatile nature, has surged by more than 50% in just the past month.
The recent rally is largely attributed to the sustained optimism surrounding newly introduced spot bitcoin exchange-traded funds (ETFs), which have amassed nearly $50 billion in assets under management and collectively hold 4% of all bitcoins, according to data from Bernstein.
Anticipation regarding an upcoming “halving” event, typically associated with upward pressure on bitcoin prices due to reduced incentives for miners, along with a general uptick in equity markets, has further bolstered bitcoin’s ascent.
INTRIGUING INSIGHT
As of Monday, Bitcoin’s total market capitalization stood at $1.29 trillion, as reported by CoinGecko, representing a more than threefold increase from its $320 billion market cap at the close of 2022, during the crypto downturn.
COUNTERPOINT
While Bitcoin approaches a historic valuation peak, the total market capitalization of the cryptocurrency market, currently standing at $2.55 trillion, falls short of the record high of over $3 trillion achieved in late 2021. This trend coincides with Bitcoin’s increased dominance within the crypto market, rising from below 40% to approximately 50% over the past two years, amidst the devaluation of numerous prominent digital assets. FTX’s crypto token, which reached a peak market value of nearly $10 billion in 2021, is now virtually worthless following FTX’s insolvency, while Binance’s coin has plummeted over 40% from its November 2021 level amid significant legal challenges. Similarly, dogecoin, the meme-inspired cryptocurrency championed by figures like Elon Musk, has seen a decline of approximately 40% from its nearly $40 billion market capitalization in November 2021.
KEY CONTEXT
The emergence of 11 spot bitcoin ETFs in January, managed by established asset managers like BlackRock and crypto-centric firms such as GrayScale, has provided investors with a more cost-effective and accessible avenue for Bitcoin investment. Last week, BlackRock’s ETF became the fastest in history to reach $10 billion in assets under management. Publicly traded companies closely associated with Bitcoin have outperformed the broader market this year, with shares of cryptocurrency exchange Coinbase, leading bitcoin miner Marathon Digital, and bitcoin advocate MicroStrategy all reaching multi-year highs.
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