Bitcoin is red-hot so far in 2024.GETTY IMAGES
A Vivid Picture of Bitcoin’s Digital Triumph in Paris
2024 has seen Bitcoin ablaze with unprecedented vigor.
HIGHLIGHTS
Bitcoin is on the verge of smashing its previous price record, with a surge pushing it beyond the $65,000 mark for the first time since 2021, heralding a potential climax to its remarkable resurgence.
KEY INSIGHTS
Bitcoin surged approximately 6%, soaring past $67,500 during early trading hours, marking its highest valuation since November 10, 2021.
The current price stands within a 2% margin of its all-time high of nearly $69,000, reached during a fleeting spike in 2021. This rally seems achievable, given Bitcoin’s characteristic volatility, with a remarkable 50% surge over the past month alone.
The recent surge is largely attributed to the bullish sentiment surrounding newly launched spot Bitcoin exchange-traded funds (ETFs), which now hold close to $50 billion in assets under management and possess 4% of the total Bitcoin supply, according to Bernstein data.
Anticipation of an impending “halving” event, traditionally associated with increased Bitcoin prices due to reduced incentives for miners, coupled with a broader uptick in equity markets, has further propelled Bitcoin’s ascent.
INTRIGUING FACT
As of Monday, Bitcoin’s total market capitalization stands at $1.29 trillion, as per CoinGecko data, a staggering threefold increase from its $320 billion valuation at the end of the crypto winter in 2022.
COUNTERPOINT
While Bitcoin flirts with record-high valuations, the overall cryptocurrency market cap of $2.55 trillion falls short of the peak exceeding $3 trillion seen in late 2021. Bitcoin’s dominance within the crypto market has risen from below 40% to around 50% over the past two years, mirroring the decline in value of several prominent digital assets. Notably, FTX’s crypto token, once valued at nearly $10 billion in 2021, is now virtually worthless post-FTX’s bankruptcy, while Binance’s coin languishes over 40% below its November 2021 levels amidst legal challenges. Dogecoin, propelled by the endorsements of figures like Elon Musk, has seen a 40% drop from its November 2021 market cap of almost $40 billion.
IN-DEPTH BACKGROUND
The advent of 11 spot Bitcoin ETFs in January, managed by established financial institutions like BlackRock alongside crypto-centric firms like GrayScale, has provided investors with a more accessible and cost-effective avenue to invest in Bitcoin. BlackRock’s ETF became the fastest in history to reach $10 billion in assets under management last week. Publicly traded stocks closely associated with Bitcoin have outpaced broader market indices this year, with shares of crypto exchange Coinbase, leading Bitcoin miner Marathon Digital, and Bitcoin investor MicroStrategy all reaching multiyear highs.
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