(The Yorkshire Analysis)Bitcoin, the world’s leading cryptocurrency, has once again crossed the $1 trillion market capitalization milestone, reaching over a two-year high. CoinMarketCap data confirms the resurgence, marking a significant achievement for the digital asset. Additionally, Bitcoin’s price soared above $60,000, a level unseen since December 2021.

The latest surge in Bitcoin’s value extends a rally that commenced in January last year, with the cryptocurrency witnessing an impressive 21% increase in value since the beginning of this year alone. The positive momentum has been attributed to the growing success of U.S. spot Bitcoin exchange-traded funds (ETFs), which have significantly boosted investor sentiment. As of the latest data from Coin Metrics, Bitcoin stands at $51,789.58, representing a 4% increase. Earlier in the day, it peaked at $58,079.00, marking its highest level since December 2021. The market capitalization of Bitcoin has now surpassed $1 trillion, a feat not seen since late 2021, according to CoinMarketCap.

The recent surge in Bitcoin’s value is partly fueled by the heightened demand resulting from the introduction of U.S. spot Bitcoin ETFs. James Butterfill, head of research at CoinShares, highlighted the substantial inflows into these ETFs, with a notable $651 million recorded recently. This influx of funds indicates a growing realization among investors that demand for Bitcoin is outpacing its newly issued supply. Since the launch of U.S. spot Bitcoin ETFs on January 11, approximately $9.5 billion has flowed into the Bitcoin market through these funds, as reported by CryptoQuant. Notably, over the past two weeks, more than 71% of new investments in Bitcoin originated from spot ETFs, excluding Grayscale Bitcoin ETF (GBTC).

The surge in Bitcoin’s value has also had a positive ripple effect on related stocks. Leading trading platform Coinbase witnessed a 14% surge, while Bitcoin proxy Microstrategy saw a 12% rise. Mining companies such as Iris Energy and CleanSpark experienced substantial gains, with increases of 20% and 12%, respectively. Similarly, Marathon Digital and Riot Platform recorded jumps of 14% each.

Raza Qadri, founder and head of market strategy at Yorkshire Global, emphasized the potential impact of the halving on Bitcoin’s supply dynamics. Qadri highlighted the significant purchases made by Bitcoin ETFs compared to the daily production by miners, indicating a potential supply shortage. Looking ahead, if the next halving follows historical patterns, continued growth in Bitcoin’s price can be expected in the months ahead.

In 2023, Bitcoin witnessed a remarkable 157% rally, driven by anticipation surrounding the approval of Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Despite a temporary dip in Bitcoin’s price following the ETF approvals, investors remain optimistic about the cryptocurrency’s prospects for the year ahead. Apart from ETF inflows, investors are closely monitoring the upcoming halving event, scheduled for April.

The halving, a supply-restricting event encoded in Bitcoin’s protocol that occurs approximately every four years, historically triggers significant rallies in Bitcoin’s price in the subsequent months.


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