Bitcoin Market Cap Surpasses $1 Trillion Milestone Amid Surge in Demand
Additionally, Bitcoin broke through the $51,000 level, hitting a price not seen since December 2021.
Bitcoin, the world's leading cryptocurrency, has achieved a significant milestone as its total market capitalization exceeded $1 trillion on Wednesday. This marks the first time since November 2021 that the value invested in Bitcoin has crossed the trillion-dollar threshold, driven by a surge in demand and sustained inflows into U.S. spot bitcoin exchange-traded funds (ETFs).
The price of Bitcoin surged to a 25-month high, reaching a peak of $52,079 on Wednesday, demonstrating a remarkable 22% increase since the beginning of February. At the time of reporting, Bitcoin was trading at $51,690, further solidifying its position as the dominant cryptocurrency in the market.
James Butterfill, head of research at CoinShares, noted a substantial inflow of $651 million into bitcoin ETFs, the largest daily inflow since their launch. This surge in demand comes amid a realization among investors that demand is surpassing the newly issued supply of Bitcoin.
Since the introduction of spot bitcoin ETFs on January 11, approximately $9.5 billion of new capital has entered the bitcoin market through these funds, with over 71% of recent investments originating from spot ETFs. This influx of funds has contributed to the positive momentum in Bitcoin's price.
Furthermore, the approval granted to bankrupt crypto lender Genesis Global Capital to sell approximately $1.6 billion worth of shares in Grayscale Investments' spot bitcoin ETF further underscores the growing institutional interest in cryptocurrencies.
While Bitcoin's market cap has now surpassed $1 trillion, it is worth noting that the cryptocurrency market as a whole exceeds $2 trillion in total value, with Bitcoin accounting for more than half of this figure. Ethereum, the second-largest cryptocurrency by market cap, has also experienced significant gains, with its price surging to $2,762, its highest level since May 2022.
The surge in Bitcoin's price and market cap reflects renewed optimism in the cryptocurrency market, fueled by expectations of a favorable economic environment and the increasing accessibility of Bitcoin investment through spot bitcoin ETFs. As Bitcoin continues to garner attention from investors and institutions worldwide, its role as a leading asset class in the digital economy appears to be firmly established.
