- February 28, 2024
Bitcoin hits $60,000 as ‘FOMO’ rally gathers pace | Business – Times of India
Bitcoin shattered expectations by hitting the $60,000 mark on Wednesday, a feat not seen in over two years. This surge is part of a larger trend, with a 42% price increase in February alone, marking its most significant monthly gain since December 2020. Currently, the cryptocurrency stands at $60,131, nearing its all-time high just below $70,000.
Week-on-week gains
The digital currency is also on track for its most substantial week-on-week increase in a year, boasting an 18.5% rise since February 21. This momentum underscores the growing interest and capital inflow into the cryptocurrency market, particularly into new US spot bitcoin exchange-traded products (ETFs).
Market dynamics and investor sentiment
Traders are flocking to bitcoin in anticipation of April’s halving event, a mechanism designed to reduce the rate at which new coins are created, thereby slowing down the overall supply. Additionally, expectations of Federal Reserve rate cuts later this year have heightened the appeal of riskier, higher-yielding assets like bitcoin. “Bitcoin is being driven by the support of consistent inflows into the new spot ETFs and outlook for April’s halving event and June’s Fed interest rate cuts,” notes Ben Laidler, a strategist at eToro.
The ETF effect
The introduction of bitcoin ETFs has significantly impacted the market, with major funds like those run by Grayscale, Fidelity, and BlackRock witnessing surges in trading volumes. In fact, this week, shares in the three most popular bitcoin ETFs have seen a dramatic increase, signaling a heightened interest in cryptocurrency investment vehicles.
Capital inflows and supply dynamics
Inflows into the top ten spot bitcoin ETFs reached $420 million on Tuesday alone, reflecting a growing confidence in the cryptocurrency’s future. Antoni Trenchev, co-founder of Nexo, highlights the market’s potential: “If $60,000 doesn’t whet the appetite, consider that 70% of bitcoin supply has remained unmoved for a year.” This scarcity, coupled with increased institutional investment, suggests a bullish outlook for bitcoin’s price.
Broader crypto market trends
Beyond bitcoin, the second-largest cryptocurrency, ether, is also experiencing significant growth, with a 3.2% increase to $3,353 and a 47% rise in February. This uptick has sparked hopes among investors for the approval of ETFs based on spot ether, indicating a broader market trend towards mainstream acceptance of various cryptocurrencies.
Future outlook
While the current market environment appears steady, there is an undercurrent of FOMO (fear of missing out) among investors.
“There certainly isn’t a manic feeling to who’s buying and why – ether gaining against the field also speaks to a more measured environment – but there’s at least a little FOMO (fear of missing out) going on right now,” Joseph Edwards, head of research at Enigma Securities, told Reuters.
The steady rise of ether, alongside bitcoin’s explosive growth, suggests a more mature, albeit still speculative, market landscape. As US regulators consider more applications for cryptocurrency-based ETFs, the market awaits with bated breath for the next phase of crypto investment evolution.
(With inputs from agencies)
Week-on-week gains
The digital currency is also on track for its most substantial week-on-week increase in a year, boasting an 18.5% rise since February 21. This momentum underscores the growing interest and capital inflow into the cryptocurrency market, particularly into new US spot bitcoin exchange-traded products (ETFs).
Market dynamics and investor sentiment
Traders are flocking to bitcoin in anticipation of April’s halving event, a mechanism designed to reduce the rate at which new coins are created, thereby slowing down the overall supply. Additionally, expectations of Federal Reserve rate cuts later this year have heightened the appeal of riskier, higher-yielding assets like bitcoin. “Bitcoin is being driven by the support of consistent inflows into the new spot ETFs and outlook for April’s halving event and June’s Fed interest rate cuts,” notes Ben Laidler, a strategist at eToro.
The ETF effect
The introduction of bitcoin ETFs has significantly impacted the market, with major funds like those run by Grayscale, Fidelity, and BlackRock witnessing surges in trading volumes. In fact, this week, shares in the three most popular bitcoin ETFs have seen a dramatic increase, signaling a heightened interest in cryptocurrency investment vehicles.
Capital inflows and supply dynamics
Inflows into the top ten spot bitcoin ETFs reached $420 million on Tuesday alone, reflecting a growing confidence in the cryptocurrency’s future. Antoni Trenchev, co-founder of Nexo, highlights the market’s potential: “If $60,000 doesn’t whet the appetite, consider that 70% of bitcoin supply has remained unmoved for a year.” This scarcity, coupled with increased institutional investment, suggests a bullish outlook for bitcoin’s price.
Broader crypto market trends
Beyond bitcoin, the second-largest cryptocurrency, ether, is also experiencing significant growth, with a 3.2% increase to $3,353 and a 47% rise in February. This uptick has sparked hopes among investors for the approval of ETFs based on spot ether, indicating a broader market trend towards mainstream acceptance of various cryptocurrencies.
Future outlook
While the current market environment appears steady, there is an undercurrent of FOMO (fear of missing out) among investors.
“There certainly isn’t a manic feeling to who’s buying and why – ether gaining against the field also speaks to a more measured environment – but there’s at least a little FOMO (fear of missing out) going on right now,” Joseph Edwards, head of research at Enigma Securities, told Reuters.
The steady rise of ether, alongside bitcoin’s explosive growth, suggests a more mature, albeit still speculative, market landscape. As US regulators consider more applications for cryptocurrency-based ETFs, the market awaits with bated breath for the next phase of crypto investment evolution.
(With inputs from agencies)
