On Monday, the price of bitcoin soared above $50,000 for the first time since 2021. This highlights the significant shift in demand for the currency that has occurred since the introduction of mainstream bitcoin investment funds earlier this year.
Since the beginning of the year, the most prominent cryptocurrency in the industry has experienced a rise of nearly fifteen percent.
This rise can be attributed to the United States Securities and Exchange Commission’s decision to reverse a policy that had been in place for ten years and to approve several spot bitcoin exchange traded funds. These funds are vehicles that provide investors with exposure to the price of bitcoin through a regulated product.
Several of the most prominent names on Wall Street, including BlackRock, the largest asset management in the world, have introduced spot bitcoin exchange-traded funds (ETFs).In spite of the fact that there was great expectation regarding their launch, the price of bitcoin dropped by approximately fifteen percent in the days that followed the clearance of the SEC.
Following signs that exchange-traded funds (ETFs) are bringing fresh money into the market, the token’s recent ascent to $50,000 — more than double the amount at which it stood a year ago — provides an opportunity for bitcoin to turn a corner for the long haul, according to analysts.
“After a disappointing launch of several bitcoin exchange-traded funds (ETFs), we are now seeing continued inflows into newly issued funds, and I believe that as a result, we are seeing much more organic demand for bitcoin,” said James Butterfill, head of research at CoinShares, a cryptocurrency investment organization.
Tim Huver, managing director on the US ETF services team at Brown Brothers Harriman, stated, “I think it’s something where you’ll start to see a specific allocation to that over time with the longer track record.”
Bitcoin price tops $50,000 after spot ETF launches spur demand https://t.co/xcxqh8sYe8
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Huver is a member of the US ETF services team. I anticipate that there will be a growing number of people interested in and adopting that space.”We’ve been saying to clients that one of the most important things is understanding the value of getting off zero,” added Kathy Kriskey, senior alternatives ETF strategist at Invesco, which teamed with Galaxy Digital to create a bitcoin exchange-traded fund (ETF) last month.
It is possible for investors to begin by removing one percent of their equity exposure and reallocating it to bitcoin, as she stated: “I think in the conversations with analysts right now, that idea of going from zero to one percent is palatable.”
“I’m sure the bitcoin bulls will say that the world is waking up to the reality of bitcoin, but given how nebulous the bitcoin ecosystem is, it’s hard to tell who’s buying and why,” said Jim Angel, a faculty affiliate at Georgetown McDonough’s Psaros Center for Financial Markets and Policy.
Angel mentioned that it is difficult to determine who is buying bitcoin and why they are buying it. “The price of bitcoin will always fluctuate violently based on the number of true believers who want to buy and the number of sceptics who want to sell,” he added. “This would be the case regardless of the market conditions.”