Bitcoin Hits $50k Level For First Time In More Than Two Years
Bitcoin hit the $50,000 level for the first time in more than two years as the world’s largest cryptocurrency was buoyed by expectations of interest rate cuts later this year and last month’s regulatory nod for U.S. exchange-traded funds designed to track its price.
The cryptocurrency has risen 16.3% so far this year, on Monday touching its highest since Dec. 27, 2021. At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96% on the day at $49,899, having oscillated around the $50,000 level.
“$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20% sell-off,” said Antoni Trenchev, co-founder of crypto lending platform Nexo.
Crypto stocks also enjoyed a boost on Monday, with crypto exchange Coinbase (COIN.O), opens new tab up 4.9% and crypto miners Riot Platforms (RIOT.O), opens new tab and Marathon Digital (MARA.O), opens new tab up 10.8% and 11.9%, respectively. Shares of software firm MicroStrategy (MSTR.O), opens new tab — a notable buyer of bitcoin — were up 10.2%.
The price of ether, the second-largest cryptocurrency, was up 4.12% at $2,607.57.
Global stock indexes also edged higher on Monday, as traders looked for cues on when the U.S. Federal Reserve might begin cutting interest rates. Analysts and financial market expectations both point to May as a potential start for rate cuts this year.
ETF EXUBERANCE
The primary driver behind bitcoin’s recent price appreciation “can be attributed to the increased inflow into BTC spot ETFs,” said Matteo Greco, a research analyst at fintech investment firm Fineqia International, in a research note.
The U.S. securities regulator on Jan. 10 approved the first U.S. spot bitcoin ETFs, a watershed for the world’s largest cryptocurrency and the broader crypto industry, which had been trying to bring such a product to market for more than a decade.
