Crypto News– Following a slight setback after the launch of spot ETFs on January 11th, the bitcoin bull market that began in January 2023 has now entered the FOMO (Fear of Missing Out) stage. This has led to the price surging above $50,000 for the first time in over two years.
Bitcoin Breaks 50,000 Dollars Barrier, a Level Unseen Since Late 2021
Although the new spot ETFs attracted billions of dollars in their initial weeks of trading, investor attention seemed more focused on funds exiting the high-fee Grayscale Bitcoin Trust (GBTC). Consequently, the price of bitcoin dropped to as low as $38,500 just days after the ETFs commenced trading.
However, recent developments have shown a slowdown in outflows from GBTC, while significant inflows have continued into the new ETF products. On February 8th, Grayscale only saw a decrease of 1,850 bitcoins, while the other nine ETFs added nearly 11,000 bitcoins to their portfolios. Similarly, on February 9th, Grayscale experienced a loss of 2,252 bitcoins, while the other nine ETFs acquired over 13,000 bitcoins. To provide context, approximately 900 newly mined bitcoins enter the market each day (a number expected to decrease to 450 per day after the Bitcoin halving in April).
The Cryptocurrency Winter Thaws
The price of bitcoin reached its peak around $69,000 in November 2021. However, the year 2022 proved to be tumultuous, marked by significant setbacks including the collapse of the Terra ecosystem and the unraveling of the crypto exchange FTX, led by its prominent founder Sam Bankman-Fried, in November 2022. These events, along with several other notable blowups within the crypto industry, contributed to a challenging year.
By the end of 2022, bitcoin had plummeted to just above $16,000, representing a staggering 75% decline from its all-time high. Many other cryptocurrencies experienced even more severe downturns. Amidst the price declines and the high-profile collapses, layoffs and closures of crypto-related businesses became commonplace throughout the industry, a trend that persisted throughout 2023.