- The rally followed a sharp increase in stablecoin market caps in recent weeks.
- Strong inflows into US spot Bitcoin ETFs also helped market sentiment.
Bitcoin [BTC] rose above the all-important $50,000 mark for the first time in more than two years, sparking a wave of bullish optimism in the digital asset market.
The king coin reached $50,000 around 5:20 PM UTC on February 12 and held the level until diamond profit-taking took it to $49,932 at the time of writing, AMBCrypto noted using CoinMarketCap.
The supply of stablecoins is increasing
According to an analysis company in the chain SantimentThe rally followed a sharp increase in stablecoin market caps in recent weeks, up nearly 5% since the start of the year.
Such increases in market caps for stablecoins were signals of increasing capital inflows into the market. This is because most traders in traditional markets would use stablecoins to enter and exit transactions on crypto exchanges.
Furthermore, whale portfolios with over $5 million in assets added 2.32% of the total stablecoin supply over the past four weeks, bringing the total share of the stablecoin market to 51.49% at the time of writing. This suggested that whales were accumulating.
Source: Santiment
Inflows into spot ETFs are increasing significantly
The rally comes amid strong inflows into US spot Bitcoin ETFs. According to AMBCrypto’s analysis of SoSo Value data, net inflows have been steadily rising over the past two weeks, turning the tide of outflows from the Grayscale Bitcoin Trust (GBTC).
At the time of writing, there were $32.42 billion worth of Bitcoins in the spot ETF market, representing 3.48% of Bitcoin’s total market capitalization.
Source: SoSo value
If that improved your mood, wait a minute! There’s more to come.
“$69,000 isn’t far”
Popular on-chain analytics firm CryptoQuant predicted a “long-term upward trend” for Bitcoin that would extend through 2024 and 2025.
The conclusions were based on the dual effect of a supply shortage (due to the upcoming halving) and a sharp increase in demand (as evidenced by the jump in active wallets), making Bitcoin an ideal store of wealth.
Read BTC price forecast for 2024-2025
The bullish predictions came from several quarters. In a statement shared with AMBCrypto, Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin, said:
“The macro factors such as the expected interest rate cut by the US Fed and the growing popularity of Bitcoin ETFs will drive the market in the medium to long term. We can expect Bitcoin to retest its all-time high of $69,000 after the halving.”