Bitcoin prices are up today, showing increased market demand for BTC after spot Bitcoin ETFs went live in the United States. It’s been a great year for Bitcoin in general, with its price going up continuously throughout the year, even with a few volatile moments that also hit other cryptocurrencies.
It was also a good year for wider crypto adoption, with the advent of spot ETFs bring the asset too the traditional stock market alongside its biggest competitors from ETFs. The public attitude toward crypto has also been more welcoming, and the path towards mainstream adoption looks all clear.
The Price
According to the latest crypto and Bitcoin news, the price of Bitcoin went up as much as $52.000, then it went down for a while and now it hover around $51,750 (at the time of writing). This is part of a long-term trend as Bitcoin has been continuously rising in value for the past five months.
The current bullish trend made 2023 one of the best years for Bitcoin investors, and chances are that 2024 will be just as good, especially with the SEC approval of spot Bitcoin ETFs. In fact, many believe that the price will go up in the coming months, with Bitcoin entering the six-figure club before the year ends.
Beyond Cryptocurrencies
Bitcoin is doing well when compared to assets beyond just cryptocurrencies. It’s now among the ten biggest market assets, including traditional assets and portfolios. For instance, Bitcoin surpassed Berkshire Hathaway in December. Berkshire Hathaway is a multinational company with insurance, rail transportation, energy generation, and distribution assets.
However, this doesn’t mean that investors shouldn’t exercise caution when it comes to buying crypto. The SEC had issued a “Fear of Missing Out” statement before approving the new funds, warning investors that they should be proceed cautiously in the light of ETF news.
After the Approval
Prior to the approval of spot Bitcoin ETFs, reports suggested that the new funds may generate $600 billion in new demand. In fact, CryptoQuant analysts predicted that an ETF approval will lead to a $1 trillion increase in Bitcoin’s market capitalization, a milestone that the cryptocurrency has now attained.
Many of the newly launched ETFs have already attracted billions of dollars in assets, acquiring as much BTC as companies like MicroStrategy acquired in three years. The pent up demand just keeps rising and may propel BTC to a price of $200,000 by the end of 2025, according to some predictions.
Institutional Investor Flow
Institutional investors have been moving on to Bitcoin and Ethereum for a while now, and in 2023, Bitcoin had a dominant place in this race. There are claims that in 2023, about $2.25 billion of crypto investments came from the so-called institutional investors. This includes big-name banks, funds, and insurance companies. It’s an increase of 2.7 times compared to the year before.
Bitcoin had the most prominent place in this regard, and as much as $1.9 billion out of those investments were investments in Bitcoin specifically.
Interest in Bitcoin from Small Investors
This isn’t to say that Bitcoin is now an asset made for the big players alone. There’s still plenty of interest in Bitcoin coming from small investors with a much smaller portfolio. Such investments add up, and they are equally important for the value of a cryptocurrency than big-name institutional investors.
The number of Bitcoin wallets holding non-zero amounts of BTC hit an all-time high on Jan. 2. Over 51 million investors hold at least some amount of Bitcoin in their digital wallets. The realized cap value on Jan. 8 was $436 billion, which is only 7% shy of the all-time high.
How is ETH Doing?
Ethereum and Bitcoin have been rivals in the world of cryptocurrency for a long time, and the same is happening right now when both currencies are trying to move into ETFs. Big companies in the finance world are also supporting ETH in their bids for a spot in the stock market.
ETH has had a few bad months and was even underperforming Solana for a while. However, it quickly recovered last week and has followed Bitcoin’s price trajectory. Chances are that the value of Ethereum will also grow as soon as the cryptocurrency gets a spot ETF. Many high-profile fund managers including BlackRock, Franklin Templeton, and VanEck Investments are already in the running to deliver a spot-based Ethereum ETF.
What is an ETF in the First Place?
An ETF, an exchange-traded fund, is a pooled investment somewhat similar to a mutual fund. It differs from mutual funds because it can be bought and sold on the stock market as its value is tied to a particular index.
Cryptocurrency coins are gain their own ETFs, meaning separate financial assets with value index tied to the value of the currency they are producing. It’s an innovative approach for the cryptocurrency industry. It allows investors from traditional financial institutions to invest in cryptocurrency markets without buying the actual coins.
Broader Changes in Cryptocurrency Markets
The increased price of Bitcoin and the introduction of ETFs is part of a larger trend for cryptocurrencies. Crypto is now widely accepted by countless industries and businesses, and small-time investors are used to keeping it as a part of their portfolios.
Traditional and conservative financial institutions such as banks, stock markets, investment funds, and even pension funds are all looking to get in on the action. This move has been happening for years, and ETFs will be the venue for investors to get exposure to Bitcoin without buying the stock of a company such as MicroStrategy, a mining company, or evening owning crypto directly.
To Sum Up
Bitcoin’s price has been on the rise for a while now, and it recently broke the $52,000 mark. The jump has largely been attributed to increased demand for BTC by newly launched spot Bitcoin ETFs. Most analysts believe the rise is due to the anticipation of SEC approval for the ETF spot for Bitcoin.
As the ETFs become available for public investors to buy and sell, chances are that the value of Bitcoin will rise even more. Some even claim that Bitcoin can rise all the way to $200.000 by 2025, as over $600 billion of new demand is generated.
