With the start of the European trading hour, Bitcoin (BTC) has surged past the major milestone of $71,000, surpassing the previous record set last week. This increase can be attributed to a combination of factors that have boosted investor confidence and triggered a wave of buying activity in the cryptocurrency market. Here’s a closer look at the four key factors driving this unprecedented rally.
#1 London Stock Exchange embraces Bitcoin and Ethereum ETNs
Just before the price surge, Bloomberg reported that the London Stock Exchange (LSE) announced plans to accept applications for the admission of Bitcoin and Ethereum Exchange-Traded Notes (ETNs) in the second quarter of the year.
*LSE TO ACCEPT APPLICATIONS FOR BITCOIN, ETHEREUM ETN ADMISSION: BBG
— Boomnieuws (@News_Of_Alpha) March 11, 2024
Although the exact launch date has not yet been confirmed, this move marks a significant step towards the acceptance of cryptocurrencies by mainstream financial markets. The inclusion of crypto ETNs on one of the world’s oldest exchanges underlines the growing institutional interest in digital assets and is expected to attract a new wave of investors to the crypto market.
#2 The impact of a short squeeze
Predictions that a short squeeze would push Bitcoin prices to new highs came true, as predicted by traditional financial portfolio manager Bitcoin Munger (@bitcoinmunger) on are looking for profit. shrunk to $70,000. New highs are coming,” Munger predicted.
We’ll probably start the week with a bang, thanks to short sellers looking to squeeze at $70,000.
New highlights are coming. Tap tap! #bitcoin pic.twitter.com/OFiNmlmc9Y
— Bitcoin Munger (@bitcoinmunger) March 10, 2024
This was evidenced by the liquidation of approximately $23.5 million in short positions during Bitcoin’s rise to $71,000, according to Coinglass. facts.
#3 Tether’s role in capital inflows
New money entered the market this weekend and last week. Leading stablecoin Tether (USDT) was minted, as on-chain analytics firm Lookonchain reported: “The Tether Treasury has minted another 2 billion USDT [yesterday]! And in just one week, 5 billion USDT was minted on Tron and Ethereum!” reported on-chain analytics firm Lookonchain.
One notable transaction involved a whale or institution receiving 261.6 million USDT from the Tether Treasury and depositing it on the Binance exchange, indicating significant preparatory activity for major trading operations.
After #TetherTreasury beaten 2B $USDTa whale/institution received 261.6 million $USDT by #TetherTreasury and poured it in #Binance.https://t.co/ohBcxqbrzThttps://t.co/Cxs2WfFPCn pic.twitter.com/fvL7Cz5Tvv
— Lookonchain (@lookonchain) March 11, 2024
#4 Rising demand for Bitcoin ETFs
The enthusiasm surrounding Bitcoin Exchange-Traded Funds (ETFs) in the United States has been extraordinary. “Bitcoin ETFs have attracted more than $7.5 billion in net new assets since launching in the US on January 11, making many of them among the most successful ETF launches of all time.” noted Matt Hougan, CIO of Bitwise, in a memo to investment professionals.
Hougan further explained: “At Bitwise, we have worked with registered investment advisors (RIAs), family offices and venture capital funds among our current buyers. Looking ahead, we are in discussions with major wirehouses, institutional advisors and major corporations, representing trillions of dollars in assets.”
This insight underlines growing confidence in Bitcoin ETFs as a mainstream investment option, with expectations of significant capital inflows from these entities from the second quarter of 2024, indicating a bullish outlook for Bitcoin’s future. He stated: “Based on current trends, I suspect we will see the first significant flows [major wirehouses, institutional consultants, and large corporations] in the second quarter of 2024.”
At the time of writing, BTC was trading at $71,296.
Featured image created with DALL·E, chart from TradingView.com
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