After 2 years, the market capitalization of Bitcoin has exceeded $1 trillion again. Crossing a critical hurdle in a bull market. Fourteen years ago, on February 14, Satoshi Nakamoto said in an internal email that “in 20 years, Bitcoin will either have a very large trading volume or no trading volume.” 」
February 14th is a special day for the Chinese God of Wealth and Western Valentine’s Day. Bitcoin rose to $52,000 on the day, up 5.01% in a single day, with a single-day trading volume of $39.1 billion.
Driven by Bitcoin, digital currency concept stocks/blockchain concept stocks rose. Canaan Technology’s ADR rose more than 19%, Internet celebrity brokerage Robinhood opened 16% higher, the largest intraday gain since August 2022, Hut 8 rose 12%, and MSTR, which holds a large number of bitcoins, rose 11.8%.
If you rank by the market capitalization of listed companies in the world, Bitcoin is currently ranked eighth. If you add the global ranking to the gold and silver market capitalization, Bitcoin ranks tenth. The top ones are, gold (13.46 trillion), Microsoft (3.02 trillion), Apple (2.84 trillion), Saudi Aramco (2.06 trillion), Nvidia (1.83 trillion), Google (1.82 trillion), Amazon (1.78 trillion), silver (1.27 trillion), Meta (1.21 trillion).
Since January 11, the SEC has approved the application of 11 bitcoin spot ETF issuers for ETF trading, and the trading volume and bitcoin reserves of bitcoin ETFs have been the focus of special attention in the global investment circle. After all, Wall Street will be one of the major forces to be reckoned with in the future that cannot be ignored. As of February 14, in the 23 trading days of the Bitcoin ETF, if you count the BTC previously reserved by Grayscale, the 11 Bitcoin issuers currently hold a total of more than 700,000 bitcoins. If you exclude the more than 460,000 bitcoins held by Grayscale, the remaining 10 plus bitcoin ETF issuers have held more than 240,000 bitcoins.
In terms of Bitcoin ETF trading volume, on February 14, IBIT continued to lead by a wide margin, leading other issuers. IBIT traded $690 million in a single day, and GBTC traded $591 million in a single day. FBTC traded $438 million in a single day. ARK traded $151 million in a single day. The demand for Bitcoin is growing stronger. At present, it has changed from the previous negative daily outflow to a positive daily inflow.
According to CryptoQuant data, more than 75% of new investments into Bitcoin are entered through these Bitcoin ETFs. Since the spot bitcoin ETF began trading on January 11, about $9.5 billion in new money has been invested in the bitcoin market through these ETFs. On February 13, there were $651 million in net inflows in a single day, the largest single-day inflow since the launch of the spot Bitcoin ETF.
This is one of the reasons for the rise of bitcoin, which is widely recognized.
The second reason is that U.S. President Joe Biden has influenced Bitcoin by posting photos of the “Dark Brandon Laser Eyes” meme with a cultural context narrative of the crypto community on social media. Biden hopes to use the attention of Bitcoin’s young audience in the US crypto community to win their votes and support his own candidacy for the next US president. As the president of the United States, some of Biden’s words and deeds will not have a significant impact on the bitcoin market.
The third reason is the optimism in the crypto market caused by the Bitcoin halving. If you speculate according to the historical cycle of Bitcoin halving, it will be halved every four years. The year 2024 marks the 4th halving of Bitcoin since its inception. The halving is expected to take place on April 23. The block height is 840,000 at halving. The year after the first three Bitcoin halves, the price of Bitcoin hit new all-time highs. In November 2021, the year after the last halving cycle, the price of Bitcoin hit an all-time high of $69,044. Reith Rhodes, former associate director of the New York State Department of Financial Services, said, “Historically, every halving has led to some sort of price bullishness. This makes sense, because you expect prices to naturally rise as supply constraints increase.
It is reported that in 2020, the bitcoin mining reward was reduced from 12.5 bitcoins to 6.25. This year, the mining reward will increase from 6.25 BTC to 3.125. Reith Rhodes said that in the two years before and after Bitcoin’s first halving in 2012, the price of Bitcoin rose by about 30,000%. In 2016, the price of Bitcoin increased by nearly 800% in two years. In 2020, investors saw a 700% gain.
In addition, there seems to be another important channel for Bitcoin to receive capital inflows. According to Wall Street Insight, the analysis pointed out that the inflow of funds received by bitcoin seems to be at the expense of the outflow of funds from gold ETFs. Ahead of this week’s US CPI data, investors redeemed $858 million from gold-backed ETFs last week, bringing year-to-date outflows to $3.2 billion.
According to foreign media reports, the current Fed’s interest rate cut schedule is very uncertain, and the direct impact on the crypto market seems to be minimal. We will continue to pay attention to the latest developments of the Fed in the future. On February 4, Fed Chairman Jerome Powell said in a rare exclusive interview with CBS that he did not expect to cut interest rates in March, and would have to cut interest rates after March. There are also other Fed officials who have said that it is appropriate for the Fed to cut interest rates 2-3 times in 2024.