BITCOIN HITS $50,000 LEVEL FOR FIRST TIME IN MORE THAN TWO YEARS

Mon 12 February 2024:

The price of bitcoin rocketed beyond $50,000 today, as investors continue to pile into new spot ETFs which received approval last month.

It marks a significant turnaround for the cryptocurrency which fell to a low of $16,000 in the wake of the collapse of FTX in 2022.

In 2023, it languished between $20,000 and $30,000 for much of the year before reaching $43,000 by December in anticipation of the US regulator’s approval of bitcoin spot ETFs, which track the price of the cryptocurrency.

It neared the $48,000 mark for the first time in a year ahead of the decision before dropping to $38,000 following the decision.

But in the last seven days, bitcoin has gained 16.7 per cent.

At the start of last week, bitcoin made moderate gains, pushing the price above $43,000 before showing signs of further momentum to close above $47,000 on Friday.

At the end of January, the Security and Exchanges Commission gave approval for the launch of 11 bitcoin ETFs, including funds from Wall Street giants BlackRock and Fidelity.

The SEC’s decision marks a significant milestone for cryptocurrencies in gaining mainstream acceptance.

Previously, the only way to buy bitcoin is from an exchange, which can be a initimidating process and involves confusing technical aspects like wallets and keys.

Among the newly launched Bitcoin ETFS, Blackrock holds about $4.2 billion in assets under management (AUM), according to Fineqia, followed by Fidelity with approximately $3.5 billion in AUM.

The second-leading cryptocurrency ethereum has also benefited from Bitcoin’s bounce back and is up 11.3 per cent in the last week to trade at $2,551.

What is a Bitcoin ‘spot’ ETF ?

Unlike a futures-based ETF, which tracks futures contracts, a spot-bitcoin ETF is an investment vehicle that directly owns some bitcoins through which investors have exposure without actually having to hold them.

Bitcoin holders think approval could lead to the market being opened to millions more investors, clearing the way for billions of dollars in fresh investment.

The US Securities and Exchange Commission has been reluctant to sanction such funds under the chairmanship of Gary Gensler, partly due to bitcoin’s volatility and its widespread use by fraudsters.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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