Bitcoin springs up after a long winter, as billions pour into spot ETFs ahead of the “halving”
Crypt-oh yeah… Investors cheered last week as bitcoin blasted past $63K to a more than two-year high. The crypto’s near-record price, up 40% so far this year, has some insiders making the case that this rally’s different from the last. The argument: the market’s matured after a long crypto winter that kicked off with the unraveling of Terraform Labs and settled in with the collapse of FTX. And retail’s hopped on board: last week, Coinbase said a more than 10x surge in traffic wreaked havoc on its exchange.
All boats: The prices of ethereum, solana, and dogecoin lifted last week with bitcoin’s rising tide. NFT sales volumes popped too.
Once bitten: This rally is mostly devoid of once popular celeb-endorsements (picture: Super Bowl classics “fortune favours the brave” and “don’t be like Larry”).
Vote of coin-fidence… Bitcoin’s pop follows January’s SEC approval of several spot bitcoin exchange traded funds, which, as of mid last week, had $8B in trading volume. On Thursday alone, a record $612M flowed into BlackRock’s spot BTC ETF. The $$ influx is running headfirst into reduced bitcoin liquidity: 80% of the crypto’s supply hasn’t changed ownership in the past six months (read: demand is high, supply isn’t). And then there’s next month’s expected BTC halving, which will — wait for it — halve the # of coins that miners like Riot Platforms and Marathon Digital get for mining a block.
Bakin’ it in: With fewer new coins being born each block, analysts say boosted demand could have an outsized effect on bitcoin’s price. Investors may be buying ahead of the halving, expecting future gains.
FOMO’s back… Bitcoin’s returned to the spotlight thanks in part to an industry-wide spring cleaning (think: the FTX trial), regulator approvals, and Main Street buy-in. That last part is clutch: analysts observed last week that the bulk of spot bitcoin ETF trades were small, suggesting more retail purchases vs. institutional mega-buys. And with at least some experts expecting the SEC to approve a spot ethereum ETF in May, the fear of missing out may not be limited to BTC.