Bitcoin surged by 32% in 20 days. Why did it reach $57,000?

Ritu13

Bitcoin rose by 10% within 24 hours, seen by many insiders as a sign of a bull market.

At 3 a.m. on February 27th, Bitcoin experienced a "late-night rally," successfully breaking through the $54,000 mark. Surprisingly, at 10 a.m. this morning, instead of expecting the market to consolidate, Bitcoin continued to show strong momentum, skyrocketing to over $57,000 on Binance within a short period. With a cumulative increase of 10.06% within 24 hours, it reached a new high since January 2022. This also continues the Bitcoin trend since the Lunar New Year in 2024. Since February 7th, Bitcoin has surged by 32.5% from $43,000 within 20 days.

Bitcoin's surge has also led to a general rise in Bitcoin ecosystem tokens. Among them, STX rose by 26.4% in 24 hours; RIF rose by 15.55%; ALEX rose by 27.39%. The total amount of liquidation on the market reached $335 million at one point, mainly from liquidation of short positions, with long positions liquidated at $77.57 million and short positions liquidated at $258 million.

What's more impressive is the substantial increase in stock prices. Coinbase (COIN.O) was priced at $193.94 at the time of writing, up 16.85% in 24 hours; Microstrategy was priced at $796.48, up 15.86% in 24 hours.

In terms of BTC contract holdings, CME leads with $1.35 billion, up 9.59% in 24 hours.

On an unremarkable Tuesday, the ETH Denver conference proceeded as scheduled. Contrary to expectations, both BTC and ETH broke through, with the Bitcoin price in RMB even surpassing the historical high in November 2021.

ETF Net Inflows
Since the SEC approved Bitcoin ETF applications on January 11th, 11 Bitcoin ETFs have been listed. Over the past 40 days, the signs of a bull market in the cryptocurrency market have become increasingly apparent, largely due to the growth in ETF net inflows.

As of February 25, 2024, the number of bitcoins held by the 11 ETFs has increased from 619,491 to 732,549, an accumulated increase of 113,058 bitcoins. The total holdings of Bitcoin ETFs are 732,000 bitcoins, with the assets under management increasing from $28.59 billion to $37.21 billion, an increase of $8.6 billion.

Currently, Bitcoin ETF holdings account for 3.73% of the total supply, exceeding the number of bitcoins in 596,000 Binance exchange wallet addresses (coincarp data). The total holdings of the top 30 Bitcoin spot exchanges are about 1.2 million (excluding ETF custody holdings). Considering the net increase of 110,000 bitcoins, the direct new circulation demand brought by ETFs accounts for about 9.34% of Bitcoin's price growth.

In all ETFs issued, except for Fidelity, which self-custodies 91,000 bitcoins, almost all ETFs have chosen Coinbase as their custodian for holding bitcoins. Coinbase currently holds 637,000 bitcoins for ETF issuers, accounting for 86.9% of all ETF holdings, surpassing Binance's holdings of 590,000 bitcoins.

Although in the days immediately following the approval of Bitcoin ETFs on January 11th, the price of Bitcoin experienced a sharp decline from $49,000 to $38,500. This significant drop was mainly due to selling pressure from Grayscale. After Grayscale reduced its holdings, the number of bitcoins held decreased from 617,000 to 445,000. However, it is also apparent that Grayscale's reduction is becoming less significant. From selling over 10,000 bitcoins in early January to selling only a few hundred bitcoins in the most recent transfer to Coinbase Prime addresses.

Moreover, according to new data today, the total trading volume of the nine Bitcoin spot ETFs reached approximately $2.4 billion yesterday, the highest since listing, slightly higher than the first day of listing, about twice the recent daily average trading volume.

Among them, iShares' Bitcoin Spot ETF IBIT had an astonishing trading volume of $1.3 billion, ranking 11th among all ETFs (top 0.3%) and 25th among stocks. Bloomberg ETF analyst Eric Balchunas posted on social media, "This is absolutely crazy for a newly listed ETF."

Since January 10th, the number of bitcoins held by IBIT, a subsidiary of BlackRock, has been steadily increasing, from 228 bitcoins to 126,900 bitcoins today. As the world's largest asset management company, BlackRock manages approximately $8.9 trillion in assets worldwide. Regardless of customer resources or brand effects, it is one of the most competitive ETF products. Currently, BlackRock's holdings in Bitcoin ETFs and Fidelity Investments have exceeded 190,000 bitcoins.

On February 26th, MicroStrategy founder Michael Saylor stated on social media that MicroStrategy bought 3,000 bitcoins from February 15th to 25th at an average price of $51,813 per bitcoin. Thus far, MicroStrategy holds a total of 193,000 bitcoins, with an average holding price of about $31,544. Earlier, Michael Saylor said in an interview that spot ETFs opened the door for institutional capital inflows into the Bitcoin ecosystem. ETFs are driving the digitization of capital, with hundreds of millions of dollars flowing from traditional analog ecosystems into digital economies every day. He believes that "Bitcoin is an exit strategy" from the traditional ecosystem

Iravan774

This is quite a significant increase now.

Yamini003

This rise is quite impressive.

Iti9

It's pretty good, and it's one of the few wallets that can be used.