On Wednesday, the total value of all bitcoins in circulation exceeded $1 trillion for the first time since late 2021. This milestone was accompanied by Bitcoin’s price breaking through the $51,000 mark, a level not seen since December 2021.
At 6:15 a.m. ET, Bitcoin was trading around $51,229, marking a 3% increase from its price 24 hours prior, according to CoinDesk data. This price surge continues a rally that began in January last year, with Bitcoin’s value increasing by over 21% since the start of this year alone.
The 2023 rally saw Bitcoin’s price surge by more than 150%, driven by anticipation for the U.S. Securities and Exchange Commission’s approval of bitcoin exchange-traded funds (ETFs). This approval was granted in January this year, following which the price of Bitcoin experienced a temporary dip.
However, a new rally began in late January, as investors now turn their attention to the upcoming “halving” event in April. During the halving, the rewards given to bitcoin miners are halved, reducing the supply of the cryptocurrency in the market. Historically, such events have preceded new all-time highs for Bitcoin in the months that follow.
The recent rally is also attributed to the high demand for ETFs. Newly-issued spot bitcoin ETFs recorded net inflows of $1.1 billion last week. ETFs allow investors to track the price movement of an asset without owning the underlying cryptocurrency, although ETF issuers are required to buy and sell bitcoin to back the derivative.
Other cryptocurrencies have also seen price increases, with Ether, the coin associated with Ethereum, reaching $2,759.87 on Wednesday, its highest level since May 2022. Investors are hopeful that an ether ETF may be approved by the SEC this year, further driving up prices in the cryptocurrency market.
(Source: CoinMarketCap | CoinDesk | Investor’s Business Daily)
