Bitcoin jumps above $60k for first time in 27 months
Analysts say continued demand for spot bitcoin ETFs, optimism that a spot ether product will hit the market this year and anticipation of bitcoin’s next halving are the main tailwinds for this rally
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Bitcoin rose above $60,000 for the first time since November 2021 on Wednesday, extending a rally of more than 40% this month.
Ether (ETH) is also on the rise, hovering around $3,300 after breaking through the $3,000 level last week for the first time in almost two years.
Analysts say continued demand for spot bitcoin ETFs, optimism that a spot ether product will hit the market this year and anticipation of bitcoin’s next block reward halving — expected in April — are all contributing tailwinds for the crypto rally.
Read more: How the halving could impact bitcoin’s price
“Halving remains the core bullish factor for BTC, steering the entire crypto landscape, as various players anticipate its impact on Bitcoin’s price trajectory in the coming months,” Bakhrom Saydulloev, product lead at payments infrastructure platform Mercuryo, said.
Bitcoin spot ETFs are continuing to rake in the cash. The 10 spot bitcoin funds that came to market on Jan. 11 have so far tallied net inflows of roughly $5.5 billion. By comparison, the largest gold ETFs — State Street Global Advisors’ SPDR Gold Shares (GLD) and BlackRock’s iShares Gold Trust (IAU) — have endured net outflows of about $2.7 billion and $350 million, respectively, since that date, according to ETF.com data.
Equities were trending lower during premarket trading Wednesday, with the S&P 500 and Nasdaq Composite indexes losing 0.3% and 0.4%, respectively.
Read more: Bitcoin halvings may be bullish — but returns have shrunk every cycle
Coming up today there are several Federal Reserve speakers scheduled to make appearances. Federal Open Market Committee members Raphael Bostic and John Williams will be speaking at 12 pm ET and 12:45 pm ET, respectively. Traders will be listening for forward looking statements and any details about a rate cutting schedule ahead of Thursday’s inflation print.
A hard landing and resulting economic slowdown could be enough to erase the stock gains traders have enjoyed since October, according to Tom Essaye, founder of Sevens Report Research.
“The reason a hard landing would be so damaging to markets in the near term is the Fed can’t really help the market out because it’s already dovishly pivoted and the market already expects aggressive rate cuts,” Essaye said. “So, while more aggressive rate cuts will provide temporary relief, it won’t stop a decline in stocks because the economic benefit of rate cuts will take too long to hit the economy to prevent a slowdown.”
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