Bitcoin, the trailblazer of the cryptocurrency realm, is on the brink of rewriting its own history books as it surges past the $67,000 mark, tantalizingly close to reclaiming its throne atop the market. This monumental rise comes after Bitcoin shattered the $65,000 barrier on Monday, marking its resurgence since 2021 and signaling a remarkable turnaround.
In a stunning ascent, Bitcoin ascended approximately 6% to soar beyond $67,500 by early afternoon, reaching its pinnacle since November 10, 2021. This surge places Bitcoin merely 2% away from its zenith of nearly $69,000 achieved during the fleeting spike of 2021, a feat that appears well within grasp considering its recent volatile surge of over 50% in just a month.
Fueling this latest rally is the sustained optimism stemming from the introduction of spot Bitcoin exchange-traded funds (ETFs) earlier this year, amassing a staggering $50 billion in assets under management and laying claim to 4% of all Bitcoins, as per Bernstein data.
Moreover, anticipation surrounding an impending “halving” event, historically known to propel Bitcoin prices upwards by curbing miner incentives and consequently, supply growth, coupled with a broader resurgence in equity prices, has further propelled Bitcoin’s ascent.
Surprisingly, Bitcoin’s total market capitalization soared to $1.29 trillion on Monday, as per CoinGecko, an exponential surge from the $320 billion market cap it held at the conclusion of the crypto winter in 2022.
However, amidst this euphoria, Bitcoin finds itself flirting with a record valuation, yet the total market capitalization of the crypto market, standing at $2.55 trillion, falls short of the record high of over $3 trillion witnessed in late 2021. This juxtaposition arises as Bitcoin’s dominance in the crypto market swelled from below 40% to approximately 50% over the past two years, underscored by the depreciation of several prominent digital assets.
For instance, FTX’s once-esteemed crypto token, which boasted a peak market value of nearly $10 billion in 2021, now lies in ruin following FTX’s bankruptcy. Similarly, Binance’s coin languishes over 40% below its November 2021 level amidst the exchange’s grappling with significant legal woes. Even dogecoin, the meme-inspired coin propelled by the likes of Elon Musk, has seen a downturn of about 40% from its November 2021 market cap of nearly $40 billion.
Behind this extraordinary saga lies a blend of legacy asset managers such as BlackRock and crypto-centric firms like Grayscale, spearheading the 11 spot Bitcoin ETFs that debuted in January. These ETFs have revolutionized investor access to Bitcoin, offering a lower-fee, more accessible avenue for capital deployment. Last week, BlackRock’s fund etched its name in history as the fastest ETF to amass $10 billion in assets under management.
Publicly-traded stocks closely tied to Bitcoin have also outshined the broader market this year, with shares of crypto exchange Coinbase, leading Bitcoin miner Marathon Digital, and Bitcoin investor MicroStrategy reaching multiyear highs, epitomizing the enduring allure of Bitcoin in the financial landscape.
Bitcoin’s meteoric rise to reclaim its throne atop the cryptocurrency kingdom not only signifies a monumental comeback but also underscores the evolving dynamics of the digital financial realm, where traditional finance intertwines seamlessly with the burgeoning crypto landscape. As Bitcoin continues to captivate investors and enthusiasts alike, its trajectory towards all-time highs is poised to rewrite the narrative of modern finance, one block at a time.