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.
The approval of bitcoin ETFs in the US have pushed the price of the cryptocurrency higher
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.
Bitcoin is now trading at $50,066 as of 5.30pm UK time.
Matteo Greco, research analyst at Fineqia International said: ‘The primary driver behind this price appreciation can be attributed to the increased inflow into BTC spot ETFs.
‘As anticipated in previous weeks, the outflow from the Grayscale Bitcoin ETF (GBTC) was expected to diminish after the initial couple of weeks of trading.
‘This expectation materialized, with GBTC outflows showing a significant decrease in the final days of January and continuing to decline through February.’
On the up: The price of bitcoin is at the highest level since the end of 2021
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.
Greco added: ‘Trading volumes remain exceptionally high, with a cumulative volume of about $5.5 billion recorded in the past week, equating to a daily trading volume of approximately $1.1 billion.
‘Since their inception, cumulative trading volumes have reached $35.6 billion, with an average daily trading volume of around $1.7 billion.’
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.
