Bitcoin Surges Past $50,000 on High Demand from ETFs
Bitcoin (BTC) has recently surpassed the $50,000 mark and is currently trading above $51,900. According to analysts from CryptoQuant, the rise in BTC’s price can be attributed to the high demand from newly approved spot Bitcoin exchange-traded funds (ETFs). In fact, an estimated 75% of new money invested in BTC is coming from these ETFs.
Bitcoin’s Market Cap Reaches $1 Trillion
With the influx of fresh money, Bitcoin’s market cap has reached $1 trillion, and its realized capitalization stands at $454 billion. This indicates a bullish outlook for the mid-term, especially with major catalysts like the upcoming Bitcoin halving in April. The realized cap has increased by $71 billion over the past year, reflecting rising investment flows and potential price surges.
The Impact of Spot Bitcoin ETFs
The impact of spot Bitcoin ETFs on BTC demand is evident as a substantial portion of new inflows enters the market through these products. In fact, $9.5 billion, which represents 2% of the total money invested in Bitcoin historically, has come through ETFs. However, CryptoQuant warns that if demand eases or outflows occur from these ETFs, it could pose a risk to price gains.
BTC’s Short-term Price Target
CryptoQuant has set BTC’s short-term price target at $56,000 based on network activity valuation. This target level represents the Metcalfe Price Valuation Band, which evaluates BTC’s price based on active user addresses. While there may be a correction risk around this level based on past trends, BTC’s price still has room to increase as unrealized profit margins are currently low.
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