According to Bloomberg, Bitcoin’s record-breaking surge can be attributed to an influx of capital into crypto products and an impending decrease in the token’s supply growth. The original cryptocurrency hit an all-time high of $72,881 on Monday and is currently trading at $72,220 as of 7:15 a.m. on Tuesday in London. Last week, a staggering $2.7 billion was invested in crypto assets, with the majority going towards Bitcoin. Both Bitcoin and a measure of the top 100 coins have seen a 70% increase in value this year.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the US on January 11 has been a major driver of this recent momentum. These ETFs, offered by companies like BlackRock Inc. and Fidelity Investments, have already attracted a net inflow of $9.5 billion. In the UK, the London Stock Exchange has announced that it will accept applications for Bitcoin and Ether exchange-traded notes. Additionally, Thailand’s securities regulator has indicated that they will allow retail buyers to invest in overseas crypto ETFs.
Ophelia Snyder, co-founder and president of 21Shares, stated on Bloomberg Television that there is a growing trend of institutional adoption of Bitcoin in the US. She also mentioned a shift in the structure of the Bitcoin market, with a greater focus on trading during US trading hours.
Some analysts are predicting even further gains for Bitcoin. Tony Sycamore, market analyst at IG Australia Pty, believes that Bitcoin could reach $80,000 in the coming months. Katie Stockton, technical analyst at Fairlead Strategies LLC, also sees $80,000 as a possibility in the medium term.
In the derivatives sector, open interest at the Chicago-based CME Group’s Bitcoin futures market has reached a new high of over 30,000 contracts. This increase is a clear sign of growing institutional demand for crypto exposure and hedging in the US.
The rally in Bitcoin’s price has resulted in approximately 1,500 new “millionaire wallets” being created daily, according to crypto analytics firm Kaiko Research. However, it is difficult to determine the breakdown of these wallets between individual and company ownership due to the nature of blockchain data. This number is lower than the daily creation of millionaire wallets during the 2021 bull run, which saw over 4,000 wallets reach the million-dollar mark.
Next month, Bitcoin will undergo a halving event, which will cut the supply of new Bitcoin in half. Combined with the demand from ETFs and expectations of looser monetary policies, this has contributed to a bullish sentiment in the crypto market. As a result, investors are putting the memories of the 2022 bear market behind them.
