The value of Bitcoin (BTC) has recently soared past $50,000 (£39,600) for the first time since late 2021, signifying a remarkable comeback for the world’s largest cryptocurrency. This upswing comes after a troublesome period following the January 11th launch of spot ETFs.
Despite the billions of dollars that were swiftly channelled into the new spot ETFs, the focus of investors seemed to be on the funds that were leaving the high-fee Grayscale Bitcoin Trust (GBTC). As a result, Bitcoin plummeted to a low of $38,500 (£30,500) just days after the ETFs opened their doors.
The recent positive shift in the market has seen a decrease in outflows from GBTC, while significant inflows have continued into the newest ETF offerings. As investments shift, only 900 newly mined bitcoins enter the market daily, a figure that will soon drop to 450 per day after the Bitcoin halving event in April.
A Rebound for Crypto Winter
Bitcoin’s all-time high was recorded in November 2021 at around $69,000 (£54,700). However, the entirety of 2022 was disastrous for the leading cryptocurrency. The collapse of the Terra ecosystem, the disintegration of the crypto exchange FTX and its founder Sam Bankman-Fried and other significant events in the crypto space contributed to the downfall.
By the end of 2022, Bitcoin’s value stood at just above $16,000 (£12,700), marking a 75% drop from its all-time peak. Other cryptocurrencies also experienced a decline in value, hence, crypto winter. Layoffs and closures became widespread within the industry, and the trend persisted throughout the better part of 2023.
Despite 2023 being considered a major bull market period for cryptocurrencies, Bitcoin’s performance remained unimpressive for much of the year. On October 1, Bitcoin’s value was a mere $27,000 (£21,400), up roughly 65% for the year but still far from its previous highs.
A Turning Point for Bitcoin
The first quarter of 2024 marks growing confidence that the US Securities and Exchange Commission (SEC) would finally approve a spot Bitcoin ETF after years of delays and adjournments. The anticipation of this decision contributed to Bitcoin’s value skyrocketing almost 60% in the final months of 2023, ending the year just above $42,000 (£33,300).
With the surge past $50,000 (£39,600), Bitcoin has demonstrated resilience and positive momentum, regaining its position as the dominant cryptocurrency powerhouse. The future looks promising for Bitcoin and other digital currencies in the UK as they continue to attract new investments and revolutionize modern finance.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
