Bitcoin surged past the $50,000 mark on Monday for the first time since December 2021, as investors bet on U.S. interest rate cuts later this year and substantial inflows into new spot cryptocurrency exchange-traded funds (ETFs).
The flagship cryptocurrency has rallied over 16% year-to-date, touching $50,124 on Tuesday morning. Crypto-exposed stocks also enjoyed a boost on Monday, with Coinbase and MicroStrategy shares rising nearly 5% and 10% respectively.
Analysts attributed bitcoin’s price appreciation primarily to accelerating inflows into new U.S. spot bitcoin ETFs approved by regulators last month. These products have seen over $1.2 billion of inflows over the past week, while outflows from Grayscale’s Bitcoin Trust have begun to slow.
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Investors are betting these spot ETFs could draw up to $100 billion in fresh inflows this year. The market is also awaiting potential approvals for ether-based ETFs and looking ahead to bitcoin’s next “halving” supply event in April 2024, which has preceded major rallies in the past.
With interest rate cuts, mainstream ETF access and bitcoin’s capped supply all providing tailwinds, analysts see room for further upside in cryptocurrency prices this year despite January’s post-ETF launch retreat.
