This week, Bitcoin (BTC) prices surged by
14.0% to $59,000, while Ethereum (ETH) rose by 6.0% to $3,300. Although ETH may
appear to be losing some upside momentum towards the end of February, it has
experienced a significant 45.0% increase since the beginning of 2024, compared
to a 38.0% increase for BTC.
The driving force behind Ethereum's rise is
the anticipated approval of a spot Ethereum-ETF on May 23 by the U.S.
Securities and Exchange Commission (SEC). While there is a possibility of a
delay, it might be perceived as unfair, especially after the SEC approved spot
Bitcoin-ETFs. Such a delay could negatively impact SEC Chair Gary Gensler's
reputation as a major opponent of cryptocurrencies.
Other factors contributing to the crypto
market rally include the upcoming halving of Bitcoin in April. Bitcoin has
already surged above the average increase observed before previous halving
events, leading some investors to view it as overbought. Short sellers trying
to capitalize on this situation have reportedly lost around $150 million in a
single day.
Crypto assets continue to attract investors.
The ProShares Bitcoin Strategy ETF (BITO) has reported $3.2 million net capital
inflows last week compared to inflows of $98.8 million in the previous week.
The iShares Bitcoin Trust (IBIT) reported net capital inflows of $167.5 million
compared to $567.3 million in the previous week. Even the battered Grayscale
Bitcoin Trust ETF (GBTC) reported net capital outflows of $44.3 million in the
past week, the lowest since the conversion into spot ETF. For comparison GBTC
has reported net outflows of $542.4 million during the previous week.
Former U.S. President Donald Trump, who once
referred to Bitcoin as a "disaster waiting to happen," now
acknowledges that Bitcoin "has taken a life of its own." Price
targets for Bitcoin are on the rise, with some crypto enthusiasts predicting a
surge up to $200,000 by the end of 2025. However, given the volatility and
uncertainties in the cryptocurrency market, cautious consideration of entry
points for investment is advised.