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Bitcoin hits $50k level for first time in more than two years

Published Feb 12, 2024 10:40AM ET Updated Feb 12, 2024 10:31PM ET
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© Reuters. FILE PHOTO: A bitcoin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/File Photo
 
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By Hannah Lang and Elizabeth Howcroft

WASHINGTON/LONDON (Reuters) -Bitcoin hit the $50,000 level for the first time in more than two years as the world's largest cryptocurrency was buoyed by expectations of interest rate cuts later this year and last month's regulatory nod for U.S. exchange-traded funds designed to track its price.

The cryptocurrency has risen 16.3% so far this year, on Monday touching its highest since Dec. 27, 2021. At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96% on the day at $49,899, having oscillated around the $50,000 level.

"$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20% sell-off," said Antoni Trenchev, co-founder of crypto lending platform Nexo.

Crypto stocks also enjoyed a boost on Monday, with crypto exchange Coinbase (NASDAQ:COIN) up 4.9% and crypto miners Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA) up 10.8% and 11.9%, respectively. Shares of software firm MicroStrategy -- a notable buyer of bitcoin -- were up 10.2%.

The price of ether, the second-largest cryptocurrency, was up 4.12% at $2,607.57.

Global stock indexes also edged higher on Monday, as traders looked for cues on when the U.S. Federal Reserve might begin cutting interest rates. Analysts and financial market expectations both point to May as a potential start for rate cuts this year.

ETF EXUBERANCE

The primary driver behind bitcoin's recent price appreciation "can be attributed to the increased inflow into BTC spot ETFs," said Matteo Greco, a research analyst at fintech investment firm Fineqia International, in a research note.

The U.S. securities regulator on Jan. 10 approved the first U.S. spot bitcoin ETFs, a watershed for the world's largest cryptocurrency and the broader crypto industry, which had been trying to bring such a product to market for more than a decade.

Greco in particular noted that outflows from Grayscale Investment's Grayscale Bitcoin Trust -- which received approval from the U.S. Securities and Exchange Commission (SEC)in January to convert to an ETF -- have begun to slow.

"While GBTC recorded a cumulative outflow of $415 million last week, representing a significant reduction from previous weeks, BTC Spot ETFs saw a total net inflow of about $1.2 billion during the same period, marking the highest weekly inflow since their launch," he said.

Analysts at Bernstein have estimated that flows into the new ETFs will build up gradually to cross $10 billion in 2024, while Standard Chartered (OTC:SCBFF) analysts have said the products could draw $50 billion to $100 billion this year alone. Other analysts have said inflows could be $55 billion over five years.

The market is also eyeing seven pending applications in front of the U.S. SEC for ETFs tied to the spot price of ether. The SEC is due to deliver a final decision on several of those proposals by May.

Investors are also looking eagerly to the next bitcoin "halving," expected in April, analysts say. That process is designed to slow the release of bitcoin, whose supply is capped at 21 million tokens - of which 19 million have already been created. Bitcoin rallied on the previous three halvings, the most recent of which was in 2020.

"With (the) fourth bitcoin halving, a first Fed interest rate cut and potential ethereum spot ETF approval, all are significant for what is the smallest, youngest and most retail-dominated asset class," said Ben Laidler, global markets strategist at eToro.

Bitcoin hits $50k level for first time in more than two years
 

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Comments (3)
Cologne fc
Cologne fc Feb 16, 2024 4:06PM ET
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wer gibt für Shit Coin 52000 Dollar aus????
Cologne fc
Cologne fc Feb 16, 2024 4:03PM ET
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Big Gauner sind Black Rock und FED
perplexed76 .
perplexed76 . Feb 12, 2024 1:34PM ET
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Another portion of criminal money flows in criminal currency.
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Grid Bandit
Grid Bandit Feb 12, 2024 1:34PM ET
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The largest criminal currency in history is the US dollar and it is the most corrupt ponzi scheme of all time, 2500% loss of purchasing power since coming off the gold standard since early 1970's. Most successful criminals in human history are the private families that run the current world banking cartel and in the US its called the Federal Reserve Bank, not a government institution but a privately controlled institution that collects interest non-stop on the dollars they create out of thin air, The Treasury only prints dollars authorized by the Federal Reserve Bank and The Fed collects interest on those dollars from US citizens for our entire lives, billions and billions of interest every year, legal criminals are called bankers!
Ac Tektrader
Ac Tektrader Feb 12, 2024 1:34PM ET
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the US dollar like al Fiat currency derives it's value from the underlying value of its economy. the Bitcoin has no underlying value. and eventually will bankrupt itself. because it has no value. it is one of the riskiest investments in the market. I think it could qualify as a long term Ponzi scheme and is dangerous to anyone hoping to hold it longer than a short term speculation.
Ac Tektrader
Ac Tektrader Feb 12, 2024 1:34PM ET
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I actually trade bit coin as a short term speculation because it does move in predictable patterns. but it is always short term, it has a history of 70- to 80%corrections and it could go to zero at any time.
Dave Tower
Dave Tower Feb 12, 2024 1:34PM ET
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Yeah, unlike cash, which is NEVER used by criminals...
Line Work
Line Work Feb 12, 2024 1:34PM ET
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And you know all that money is from criminal sources because...?
 
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