Bitcoin soared to a new high above $71,000 on Monday, buoyed by increasing demand for the cryptocurrency amid expectations of interest rate cuts by the Federal Reserve this year.
The digital currency reached a peak of $71,432 during Asian trading hours, marking a remarkable 70 percent surge since the beginning of the year.
Understanding the dynamics of the cryptocurrency market is crucial as it evolves as a financial instrument.
According to a report by Binance, January 2024 witnessed a period of consolidation for cryptocurrency markets, with a marginal 0.4% increase in total market capitalization.
The approval of spot bitcoin ETFs in the US was a pivotal moment in this period.
However, the price of BTC surged to nearly $49,000 post-ETF approvals on January 10, before experiencing significant corrections.
Despite Grayscale’s notable outflows, overall inflows into ETFs remained positive.
January 2024 marked a historic milestone for the cryptocurrency industry, although the top ten coins by market capitalization exhibited mixed results during this consolidation phase.
BTC remained at the forefront with modest price gains amidst conservative market sentiment.
TRX and LINK emerged as top performers, while ETH and BNB displayed resilience to market corrections.
In February, bitcoin prices surged, surpassing $60,000 and closing the month at over $61,000, reflecting a 42% monthly gain. Ethereum also witnessed a substantial 45% increase, closing above $3,300.
Among the top 10 cryptocurrencies, Ethereum emerged as the top performer, while XRP recorded the lowest gain.
The bullish momentum from 2023 extended into 2024, with bitcoin and Ethereum hitting new 52-week highs.
The approval of 11 spot bitcoin ETFs by the SEC on January 10 marked a significant milestone, leading to a surge in trading volumes and inflows into popular ETFs.
On February 27, IBIT registered record inflows of $520.2 million and a daily trading volume of $1.36 billion.
According to Joel Kruger, FX strategy consultant at LMAX Group, the influx of traditional market participants into spot bitcoin ETFs underscores growing interest in cryptocurrencies.
As ETF providers enhance education and promotional efforts, interest in cryptocurrencies is expected to continue growing.
