The more than 10-year-old Grayscale Bitcoin Trust is the largest portfolio dedicated to the token and was converted into an ETF on the same day the new fund went live, with more than $6 billion in assets from Grayscale vehicles. caused the spill. It has slowed down since then.
The batch of 10 ETFs collectively raised a net US$2.8 billion.
The hype around ETFs fueled Bitcoin’s resurgence last year, with the token briefly trading above $49,000 on its first day of trading. That followed a multi-day drop of $10,000 as investors took profits and watched the ETF move. The subsequent rebound put $50,000, a level last seen in 2021, within sight.
Optimism regarding Bitcoin’s once-in-four-year halving, scheduled for April, is also widespread across cryptocurrencies. The halving reduces the amount of Bitcoin that miners receive to power the powerful computers that verify transactions on the blockchain. This event is often seen as supporting prices based on historical precedent.
Previous halving events have been “preceded by strong bull markets,” the team, which includes DBS Bank chief economist Taimur Baig, wrote in a note.
“There is a simple economic reason for prices to rise. As mining rewards decrease, the price of mining output (i.e. Bitcoin) will increase to compensate and to avoid causing a withdrawal of computational resources by miners. We need to rise,” the team said.
Apart from ETF inflows, sentiment towards Bitcoin during the ongoing Lunar New Year holiday in Asia has been “generally positive,” Fundstrat Global Advisors said in a note.
Bitcoin remains about $20,000 below its all-time high reached in 2021, when the pandemic-era bull market was supported by easy money.
Additional reporting: Elijah Nicholson Messmer and Muyao Shen