Bitcoin surpassed the $50,000 mark on Monday for the first time in more than two years, as the initial backlash from the launch of a new type of investment indexed to this digital currency fades, in a context of appetite for renewed risk.
Around 6:30 p.m. in Paris, the price of the most followed cryptocurrency rose 5.4% to $50,145.31, after peaking earlier in the session at $50,327.56, a highest since December 2021.
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In terms of heritage, bitcoin raises many questions
It has gained nearly 18% since the start of the year, and has soared by more than 200% since January 2023. The cryptocurrency benefited from the return of the positive effect of the launch of a new investment product, a bitcoin index fund (ETF) that directly tracks the price of the digital asset.
Highly awaited by the sector, analysts expected that this new type of investment would allow a larger part of the general public to invest in this cryptocurrency without having to hold it directly.
Also read: Gary Gensler, the crypto skeptic forced to open the doors of Wall Street to bitcoin
Following the approval of these ETFs by the American market watchdog, the SEC, the price of bitcoin consequently rose to $49,021 on January 11.
An existing fund belonging to asset manager Grayscale, which had more than $28 billion in assets before the SEC green light, was notably converted into an ETF.
Waiting for a rate reduction
However, wishing to cash in their winnings, some clients of the Grayscale fund decided to withdraw several billion dollars, briefly causing the value of bitcoin to fall.
But
“as expected”
,
“outflows from the Grayscale fund decreased after the first two weeks”
, notes Matteo Greco, analyst for the digital assets and fintech investment firm Fineqia.
According to Victoria Scholar, analyst at Interactive Investors, two other current factors
are “driving risk appetite and demand for cryptocurrencies”
.
Next April, a rare event could indeed contribute to reducing the quantity of bitcoins in circulation and therefore increasing their value.
This is
“halving”
,
a
technical phenomenon which consists of halving the reward of bitcoin
“miners”
(those who contribute to the creation of blockchains) and which occurs approximately every four years.
Finally, bitcoin is also riding on the strengthening of expectations of rate reductions, in particular from the Federal Reserve (Fed).
This prospect increases the amount of liquidity in circulation and encourages investors to turn more towards assets like bitcoin.
If the price of bitcoin has not returned to its absolute high of November 2021, at nearly $69,000, it has largely recovered since the collapse of its prices at the end of 2022, in the wake of the sinking of several giants in the sector.