Bitcoin Hits $52K as Crypto Market Reaches $2 Trillion Cap

The surge of Bitcoin beyond the $52K milestone on Wednesday, hitting $52,000, led to the liquidation of leveraged positions totaling $89.28 million due to its meteoric rise over the past day.

Following the approval of new spot Bitcoin ETFs by the U.S. SEC, Bitcoin experienced a tumultuous journey in the market.

On January 22, 2024, BTC prices surged to $49K, plummeting to a low of $38,500. However, BTC has shown resilience since then, steadily climbing in value. Currently, BTC hovers just below the $52K mark, having tapped it at 10:05 a.m. on Wednesday.

Factors Driving BTC Surge

The surge in BTC over the past two weeks, marking a 21% increase against the U.S. dollar, can be attributed to two primary factors.

Introducing new spot Bitcoin ETFs has generated significant investor interest, with Blackrock and Fidelity's offerings witnessing record-breaking inflows. These ETFs and others have offset outflows from older funds like Grayscale's flagship GBTC, increasing demand for the already scarce Bitcoin. Coinshares data indicates that spot BTC ETFs have amassed a staggering $4 billion in net inflows.

Moreover, according to the latest Alpha Report by Bitfinex, substantial inflows into crypto assets have fueled growing investor confidence in Bitcoin.

According to Coin Market Cap, the slowdown in selling of Grayscale's GBTC funds and a notable uptick in total crypto asset inflows have contributed to this confidence. Notably, the Bitcoin holdings of the new BTC ETFs now surpass Microstrategy's holdings, with expectations of continued flows.

Anticipation for Bitcoin's Fourth Halving Event

Another significant driver of Bitcoin's surge is the anticipation surrounding its upcoming fourth halving event, scheduled to occur after April 19, 2024.

This event will halve Bitcoin's block reward from 6.25 BTC to 3.125 BTC, reducing the daily Bitcoin supply from 900 to approximately 450.

According to Bitcoin News, historically, halving events have intensified Bitcoin's scarcity, boosting its value.

Tuesday's dip in price below $49K, following the release of the U.S. Consumer Price Index (CPI) report, resulted in the liquidation of substantial short positions from derivatives markets.

Coinglass.com reported liquidations totaling over $89.28 million in BTC shorts and $39.47 million in ETH shorts within the last day. Despite this, open interest in Bitcoin futures has reached new highs, and aggregated open interest in BTC options continues to rise.

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