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Bitcoin: Why it peaked at $50,000 and what could be different this time

2024-02-13T13:31:00.597Z

Highlights: The value of bitcoin surpassed $50,000 on Monday for the first time in more than two years. Analysts believe that the rate cut expected from the Federal Reserve this year, plus the halving that will generate a shortage of the asset are creating a new context for the resurgence of bitcoin. Nine bitcoin funds began trading in the US on January 11 and have so far attracted more than $9 billion in investments. Two of the offerings, from BlackRock and Fidelity Investments, appear as the most successful ETFs ever launched based on assets obtained after one month on the market.


In January, bitcoin ETFs, which track the price of the currency, began operating and raised US$9 billion. In April there will be another milestone that could increase demand for the most famous cryptocurrency.


The value of bitcoin

surpassed $50,000 on Monday for the first time in more than two years

on expectations of interest

rate cuts

this year and last month's regulatory approval of US exchange-traded funds (ETFs) designed to continue their price, which is expected

to increase exchanges and demand.

Since January 22, the most popular cryptocurrency

has appreciated 25%

and reached $50,328, according to Bloomberg data, which is its highest level since the end of 2021. It then fell slightly to $49,950.

In any case, the currency is still

far from its record value of US$68,789 in November 2021,

but this progress marks a

recovery after a series of scandals

that shook the cryptocurrency industry.

Bitcoin has recovered all its losses since the implosion of the TerraUSD

stablecoin

in May 2022, which set in motion a wave of scandals in the sector.

The most notable was the

collapse of FTX

, the second largest cryptocurrency exchange platform, and the arrest of its co-founder

Sam Bankman-Fried

, who faces up to 110 years in prison, for what the prosecution describes as

"one of the largest financial frauds in the history of the United States.

In November,

Changpeng "CZ" Zhao

resigned as CEO of

Binance

, the largest crypto exchange, after acknowledging that he and the company

had violated US anti-money laundering laws.

Now the manager awaits sentencing.

“$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to move above the key psychological level but led to a 20% drop,” said Antoni Trenchev. , co-founder of the cryptocurrency lending platform Nexo, to the Reuters agency.

Nine bitcoin funds began trading in the US

on January 11 and have so far attracted more than

$9 billion

in investments.

Two of the offerings,

from BlackRock and Fidelity Investments,

appear as the most successful ETFs ever launched based on assets obtained after one month on the market, according to a Bloomberg Intelligence analyst survey.

There are signs of a “

growing movement of institutional money into this asset class

,” Caroline Bowler, CEO of cryptocurrency platform BTC Markets Pty, told Bloomberg.

The more than decade-old Grayscale Bitcoin Trust

fund

is the largest portfolio dedicated to the token and converted to an ETF on the same day the new funds launched.

Optimism surrounding

bitcoin's quadrennial halving, scheduled for April, is also spreading to all cryptocurrencies

.

Halving reduces the amount of bitcoins miners receive for operating the powerful computers that verify transactions on the blockchain.

Analysts believe that the

rate cut

expected from the Federal Reserve this year,

plus the halving that will generate a shortage

of the asset, plus new investments in ETFs from institutional funds are creating a new context for the resurgence of bitcoin.

NE

Source: clarin

All business articles on 2024-02-13

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