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Key takeaways
- Bitcoin briefly surpassed $50,000 for the first time in more than two years at midday Monday, and this week analysts are tracking whether it can rise and stay above that level.
- Spot bitcoin exchange-traded funds (ETFs) late last week recorded their strongest net inflows since trading began in January.
- A Grayscale report notes that bitcoin ETF inflows and the upcoming bitcoin halving are possible tailwinds for prices.
- El Salvador’s pro-bitcoin president was re-elected for another term.
- The Solana network experienced another outage, temporarily halting the use of decentralized applications built on that blockchain.
A weekly summary of cryptocurrency market news, why it’s important to you, and what it means for cryptocurrency investors in the coming days.
Bitcoin price (BTCUSD) surpassed $50,000 on Monday, for the first time since late 2021, thanks to strong bullish sentiment driven by bitcoin exchange-traded fund (ETF) inflows, exuberance around the upcoming halving, and re-election of the pro-bitcoin president of El Salvador. , Nayib Bukele.
What happened in the crypto markets last week?
Bitcoin investors enjoyed a roughly 15% rally over the past week through midday Monday to touch $50,000 from below $43,000. Much of this is attributed to detect bitcoin ETF But that was not the only factor that drove up prices.
Bitcoin Spot ETFs Were On a Roll
Bitcoin Spot ETF that were recently approved by US regulators experienced their second largest day in terms of tickets last Friday, with just over $540 million flowing into various bitcoin ETF offerings that day.
Strong numbers were also shown for the ETF category on Thursday, with over $400 million in net inflows. This despite the fact that more than 150 million dollars came out of Bitcoin Trust in Grayscale (GBTC) over the two-day period. BlackRock’s iShares Bitcoin Trust (IBIT) accounted for almost half of all entries during those two days.
According to Eric Balchunas, senior ETF analyst at Bloomberg, IBIT and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are the two largest ETFs in history when measured by assets held after just one month of existence.
Bitcoin Halving Optimism Propped Up Price
The combination of strong spot and scheduling bitcoin ETF inflows bitcoin halving The expected mid-year event, which will halve the value of rewards for mining bitcoins, appears to be driving the positive narrative in crypto overall, as noted in a report issued by crypto investment firm Grayscale Advisors LLC last week.
The report suggested that the next round of bitcoin halving differs significantly from previous ones and may not turn out to be entirely negative for bitcoin miners.
“While the reduction of block rewards poses a challenge, the growing role of ordinal enrollments and Layer 2 projects within the bitcoin ecosystem have recently emerged as promising use cases,” the report says.
Bitcoin Ordinals assign more information to the serial numbers of each satoshi, the smallest bitcoin unit and additional data is called an inscription. Layer 2 projects are intended to improve the performance (or processing speed) of any cryptocurrency blockchain network.
“These innovations can offer a silver lining for miners by potentially improving transactions performance and increase transaction fees for the network,” the Grayscale report says.
El Salvador’s crypto-loving president won another term
A relevant geopolitical event for bitcoin was the re-election of pro-cryptocurrency president Nayib Bukele in El Salvador through a landslide victory.
The country has accumulated bitcoins to keep them in reserve and has made the legal tender cryptocurrency in 2021 under Bukele’s leadership, among other initiatives, although momentum has been limited for his much-publicized plans for a tax-free crypto haven powered by geothermal energy from a volcano, according to Reuters.
Solana Court
Beyond bitcoin, another novelty in the cryptocurrency space was the temporary interruption of the solarium (SOLUSD) network on February 6 due to an error. The level of centralization on Solana, which has seen increased activity in recent months, and the limited ability to pause the network for maintenance is something the crypto system has been criticized for in the past.
What to expect from crypto markets this week
This week, analysts will monitor how high Bitcoin can go after breaking above the key price level on Monday. The crypto asset previously faced resistance below $50,000 in late March 2022 and early January this year. However, Bernstein analysts expect a bitcoin rally in “FOMO,” or fear of missing out.
In other notable crypto developments, the Craig Wright The Crypto Open Patent Alliance (COPA) case will continue in the UK. Wright faces charges of forgeries on an “industrial scale” in an attempt to convince people that he is the creator of bitcoins. Satoshi Nakamoto.
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