15.02.2024 – Some firecrackers just take longer: the Bitcoin price has finally ignited with a bang following the authorisation of spot-based index funds. We explain why the fuse had to smoulder for so long.

The bulls are rejoicing: Bitcoin’s total market cap has just exceeded the USD 1 trillion mark again – for the first time since November 2021, as the financial blog “ZeroHedge” stated. And for the first time since the end of 2021, BTCUSD climbed above 52,000 dollars. In the picture the daily chart.


Source: Bernstein Bank GmbH

As a result, Bitcoin has caught up with the market capitalisation of Tesla, Taiwan Semiconductor, Eli Lilly and Berkshire Hathaway and moved into the list of the ten most valuable assets in the world, ZeroHedge went on to explain. But why all this only now? After all, the US Securities and Exchange Commission had already fired the starting gun for the approval of spot-based index funds on 11 January. Specifically, the United States Securities and Exchange Commission (SEC) gave the thumbs up to eleven ETFs.

Sector rotation
CoinTelegraph provides the answer to the riddle. According to it, there was a gigantic rotation within the financial sector. All in all, BlackRock and Fidelity in particular registered massive inflows – both now have more than 1 billion dollars in assets under management. However, a lot of money flowed out of the Grayscale Bitcoin Trust (GBTC) – according to “CoinTelegraph”, more than 1 billion dollars were lost in just a few days. The website did not give a reason for this mistrust.
In the meantime, the industry is increasingly using e-currencies for portfolio diversification in order to reduce risks and increase returns in the fight against inflation. All in all, the ETFs – ex Grayscale – have collected more than 11 billion dollars in assets.

Out of gold
And there is apparently another interesting development for the BTC bulls. According to ZeroHedge, gold ETFs had to cope with an outflow of USD 858 million last week alone. This year, the loss has already totalled 3.2 billion dollars. The inflows into BTC funds can therefore be partly explained by the departure from the precious metal.

Hoping for the halving
The bulls are now looking ahead to the upcoming halving. Citing a Grayscale analysis, CoinTelegraph reports that the current mining rate is 6.25 Bitcoin per block, which equates to an annual value of 14 billion dollars. This is enough to maintain the price of 43,000 dollars used for the analysis. In other words: after the halving, only 3.125 Bitcoin would be mined – and thus only 7 billion dollars in purchases per year would be needed to support the price. We look forward to seeing how things develop – and wish you successful trades and investments!

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.