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Cryptocurrency Market News: Bitcoin Surges Above $50,000
Key points
- Bitcoin briefly topped $50,000 for the first time in more than two years at midday on Monday, and analysts are monitoring this week whether it can climb and hold above that level.
- At the end of last week, spot bitcoin exchange-traded funds (ETFs) saw their largest net inflows since trading began in January.
- A Grayscale report points to spot inflows into Bitcoin ETFs and the upcoming Bitcoin halving as potential price tailwinds.
- El Salvador’s pro-bitcoin president has been re-elected for another term.
- The Solana network has suffered another outage, temporarily halting the use of decentralized applications based on that blockchain.
A weekly roundup of cryptocurrency market news: why it matters to you and what it means for cryptocurrency investors in the coming days.
Bitcoin Price (Currency Exchange) surpassed $50,000 on Monday for the first time since late 2021, riding strong bullish sentiment driven by inflows into bitcoin exchange-traded funds (ETFs), excitement over the upcoming halving and the re-election of El Salvador’s pro-bitcoin president, Nayib Bukele.
What happened in the cryptocurrency markets last week?
Bitcoin investors enjoyed a roughly 15% rally over the past week through midday Monday, hitting $50,000 from under $43,000. Much of that is attributed to spot bitcoin ETF but this was not the only factor that pushed prices up.
Spot Bitcoin ETFs Were Soaring
Bitcoin Spot ETFs that were recently approved by US regulators recorded their second-biggest day in terms of inflows last Friday, with just over $540 million flowing into various bitcoin ETF offerings that day.
The ETF category also saw strong numbers on Thursday, with over $400 million in net inflows. This despite over $150 million being outflows from Grayscale Bitcoin Confidence (GBTC) over the two-day period. BlackRock’s iShares Bitcoin Trust (IBITS) accounted for nearly half of all inflows in those two days.
According to Eric Balchunas, senior ETF analyst at Bloomberg, IBIT and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are the two largest ETFs in history when measured by assets held after just one month of existence.
Bitcoin halving optimism has supported the price
The combination of solid inflows of spot bitcoin ETFs and programming bitcoin halving The mid-year event that will halve the value of bitcoin mining rewards appears to be driving the positive narrative in the cryptocurrency industry overall, according to a report released last week by crypto investment firm Grayscale Advisors LLC.
The report suggests that the next bitcoin halving cycle will differ significantly from previous ones and may not be all bad for bitcoin miners.
“While reducing block rewards is a challenge, the growing role of ordinary memberships and Level 2 projects within the Bitcoin “Ecosystems have recently emerged as a promising use case,” the report reads.
Order Bitcoin assign more information to each serial number Satoshi-the smallest unit of bitcoin and the extra data is called an entry. Layer 2 projects are intended to improve the throughput, or processing speed, of any cryptocurrency blockchain network.
“These innovations could offer a silver lining to miners, potentially improving both transactions flow rate and increasing transaction fees for the network,” the Grayscale report reads.
El Salvador’s Crypto-Loving President Wins Another Term
A significant geopolitical event for Bitcoin was the re-election of pro-crypto President Nayib Bukele in El Salvador with a landslide victory.
The country has been stockpiling bitcoins to hold in reserve and has made legal tender cryptocurrency in 2021 under Bukele, among other initiatives, although enthusiasm for his widely publicized plans for a tax-free crypto haven powered by geothermal energy from a volcano has been limited, according to Reuters.
Solana Interruption
In addition to bitcoin, another novelty in the cryptocurrency sector was the temporary interruption of the Solana (SOLUSD) on February 6th due to a bug. The level of centralization in Solana, which has seen high activity in recent months, and the limited ability of the network to be paused for maintenance are something the cryptocurrency has been criticized for in the past.
What to Expect from Cryptocurrency Markets This Week
This week, analysts will be watching how high bitcoin can go after it breaks out of a key price level on Monday. The cryptocurrency has previously encountered resistance below $50,000 in late March 2022 and early January this year. However, Bernstein analysts are predicting a “FOMO” or fear-of-missing-out rally in bitcoin.
In other noteworthy events in the cryptocurrency industry, My Friend Craig Wright v. Crypto The Open Patent Alliance (COPA) case will continue in the UK. Wright is facing charges of “industrial scale” forgery in an attempt to convince people he is the creator of bitcoin Satoshi Nakamoto.