Bitcoin traded above $50,000 briefly on Monday for the first time since December 2021, as demand for recently launched spot bitcoin ETFs remains robust.
The largest cryptocurrency
BTCUSD,
has risen 13% over the past seven days, according to CoinDesk data. It has climbed 11% so far this year, building on a more than 150% gain in 2023. However, bitcoin is still down roughly 28% from its all-time high of $68,990, reached in November 2021.
The latest rally appears to be driven by spot-market demand, which has driven a significant spike in bitcoin’s trading volume, according to Sean Farrell, head of digital-asset strategy at Fundstrat. “A substantial portion of this volume is likely entering the market via spot ETFs chasing the positive weekend price action,” Farrell wrote in a Monday note.
Outflows from Grayscale Bitcoin Trust
GBTC,
the largest spot bitcoin ETF, have been slowing, while demand for rival bitcoin ETFs remains robust, according to Mark Connors, head of research at digital-asset manager 3iQ.
Ken Jimenez, Dow Jones Market Data
Meanwhile, some investors are also seeking bitcoin as a potential safe haven amid geopolitical uncertainty, Connors said.
“We have 60+ major elections globally in 2024 in an anticipatedly volatile geopolitical environment,” according to Thomas Perfumo, head of strategy at Kraken. “These challenges drive the movement of capital to high-quality, store-of-value assets like bitcoin,” Perfumo wrote in emailed comments.
Yet bitcoin’s price remains highly volatile relative to traditional store-of-value assets like gold, and many believe there’s still not enough evidence that it can be used as a safe haven.
What’s next
Connors is now eyeing a range of $60,000 to $65,000 for bitcoin’s next level. He still expects the crypto to reach up to $160,000 by the end of 2024 and $350,000 by the second half of 2025.
Greg Magadini, director of derivatives at Amberdata, said he is expecting bitcoin’s market capitalization to rise above $1 trillion this week. The crypto’s market cap stood at around $977 billion on Monday, according to data from CoinMarketCap.
