Bitcoin reached the $50,000 mark for the first time in over two years, propelled by anticipation of forthcoming interest rate reductions and recent regulatory approval for US ETFs aimed at mirroring its price movements.
Investors are eagerly anticipating the upcoming Bitcoin "halving" expected in April, according to analysts. This event is intended to decrease the rate at which new Bitcoins are produced, with the total supply capped at 21 million tokens, of which 19 million have already been generated. Historically, Bitcoin has experienced rallies following previous halvings, the most recent of which occurred in 2020.
Ben Laidler, global markets strategist at eToro, noted the significance of the fourth Bitcoin halving, alongside a potential Fed interest rate cut and the potential approval of an Ethereum spot ETF. These developments hold particular importance for the cryptocurrency market, characterized as the smallest, youngest, and predominantly retail-driven asset class.