The total investment in bitcoin has surged above the $1 trillion mark, marking a significant milestone not seen since November 2021. On Wednesday, Bitcoin’s price soared to $51,606, reaching its latest 25-month high and experiencing a 4.1% daily increase. According to Coingecko, this surge pushed the token’s market cap to $1.005 trillion.
Despite the all-time high of $1.28 trillion in November 2021, Bitcoin’s current rise represents a remarkable 20% increase since the beginning of February, set to be its most substantial monthly gain since October. Bitcoin investments constitute over half of the $2.01 trillion total in the overall cryptocurrency market, encompassing ether and other digital coins.
Analysts attribute recent price action to strong inflows into new U.S.-listed ETFs. Capital flows into the 11 U.S. spot bitcoin ETFs rose to $1.64 billion in the week ending Wednesday, as reported by LSEG Lipper data. The last five trading sessions saw $409 million in inflows to these products, which received regulatory approval and commenced trading in January.
While acknowledging the pace of these inflows remains uncertain, analysts at crypto liquidity provider B2C2 suggest that if recent trends continue, large inflows could lead to further price surges for spot bitcoin.
In response to Bitcoin’s positive momentum, shares of U.S.-listed cryptocurrency companies experienced pre-market gains. Coinbase saw a 7% increase, while miners Riot Platforms and CleanSpark surged nearly 9% and 16%, respectively.
After facing challenges throughout 2022 and the first part of 2023, Bitcoin’s recent resurgence is attributed to hopes of a soft landing for the economy and the introduction of spot bitcoin ETFs. These ETFs, hailed as a game-changer for the industry, allow investors to gain exposure to bitcoin without directly holding the asset.
The cryptocurrency market’s positive momentum extends beyond Bitcoin, with the second-largest token, Ethereum, rising by 4.1% to $2,742, its highest level since May 2022.
