The leading cryptocurrency has seen a nearly 15% increase since the beginning of the year, primarily due to the US Securities and Exchange Commission’s reversal of a decade-long policy to endorse multiple spot bitcoin exchange-traded funds (ETFs). These vehicles provide investors with regulated exposure to bitcoin’s price movement through a structured product. The approval of such ETFs signifies a notable shift in regulatory stance and has played a pivotal role in driving up investor confidence and interest in bitcoin, contributing significantly to its recent surge in value.

Bitcoin traded above $50,200 on Monday afternoon, briefly reaching $50,314 earlier in the day, marking its highest level since December 2021. Despite spiking to $49,000 on the ETF launch day, it retreated to early December 2023 levels post-SEC announcement. Nonetheless, BTC has surged over 18% year-to-date.

Ethereum is currently hovering near $2,650, marking four-week highs. The cryptocurrency has experienced a 15% surge in value since the start of 2024. This upward trajectory reflects growing investor confidence and interest in Ethereum, contributing to its recent gains and positioning it favorably in the cryptocurrency market.

On Monday, crypto exchange Coinbase (COIN) experienced a 3.8% surge, propelling it above its 50-day moving average. Similarly, Marathon Digital stock surged by 14.2%, nearing its late December highs. These gains indicate renewed investor interest and confidence in both Coinbase and Marathon Digital, reflecting positive sentiment within the cryptocurrency and blockchain technology sectors.

Bitcoin surpasses $50,000 amid ETF launches, which ignite increased demand for the cryptocurrency

Overview of Bitcoin ETFs’ performance in the market.

Spot bitcoin ETFs surged over 5.5% in trading, following a 4% increase on Friday, indicating continued investor interest and positive market sentiment towards these investment vehicles.

Since the launch of spot bitcoin ETFs on January 11th, BlackRock’s iShares Bitcoin Trust (IBIT) has dominated fund inflows, amassing approximately $3.75 billion by February 9th. Fidelity’s Wise Origin Bitcoin Fund (FBTC) follows closely behind with $3 billion in inflows. Recently, ARK’s 21Shares Bitcoin ETF (ARKB) surpassed Bitwise Bitcoin ETF (BITB) in terms of inflows, with ARKB totaling $918.5 million and BITB at $785.8 million as of February 9th. These figures reflect the growing popularity and investor interest in bitcoin-based investment products since their introduction in the market.

As of February 9th, Grayscale Bitcoin Trust (GBTC) has seen approximately $6.38 billion in outflows, although the pace of these outflows has gradually diminished. Nonetheless, Grayscale retains its leadership position in terms of assets, boasting $22.12 billion under management, followed by iShares Bitcoin Trust with $4.18 billion. Despite GBTC’s outflows, the newly introduced ETFs have accumulated $2.65 billion in inflows since their launch, as reported by BitMEX research. This data underscores the evolving landscape of bitcoin investment products, with investors increasingly diversifying their exposure to cryptocurrency through alternative vehicles like ETFs alongside traditional offerings like GBTC.

Bitcoin surpasses $50,000 amid ETF launches, which ignite increased demand for the cryptocurrency

Plenty of space for growth.

Bitcoin’s trajectory in 2024 is influenced by various factors, notably the upcoming halving event in April and increased institutional involvement following ETF launches. These trends are expected to shape Bitcoin’s performance, suggesting potential for further growth and volatility as the cryptocurrency market continues to evolve and attract institutional interest.

According to Joel Kruger, market strategist at LMAX Group, mainstream adoption will be the pivotal factor going forward. With the approval of bitcoin spot ETFs, traditional institutions are expected to intensify efforts to promote bitcoin’s value proposition. This shift in focus towards wider adoption indicates a potential surge in institutional interest and investment, further solidifying bitcoin’s position as a mainstream asset class in the financial landscape.

Kyle DaCruz, Director of Digital Assets Products at VanEck, highlights that institutional inflows into bitcoin are yet to reach their full potential. VanEck’s spot bitcoin ETF, the VanEck Bitcoin Trust (HODL), launched on January 11th, attracting over $75.5 million in inflows and managing $161.7 million in assets as of February 9th, as reported by BitMEX.

However, many financial advisors still lack access to these ETFs due to rigorous due diligence processes and other prerequisites imposed by platforms. DaCruz emphasizes that once these barriers are overcome and financial advisors gain access, the floodgates for institutional investment will open. This could unleash the full potential of bitcoin, transforming it into a multitrillion-dollar asset class within the financial advisor community.

DaCruz’s remarks underscore the anticipation surrounding wider institutional participation in bitcoin and the role that accessible investment vehicles like ETFs could play in catalyzing this transformative shift in the cryptocurrency market.