Crypto wrap: Bitcoin sees profit booking after touching $1 trn market cap

Bitcoin (Photo: Bloomberg)

Bitcoin, in the last one week, witnessed profit-booking after it topped $52,000 last week, breaching the market cap of $1 trillion for the first time since November 2021. However, it continued to hover over $51,000.

“Bitcoin is consolidating at $51,000, witnessing an increase in profit booking,” said Edul Patel, chief executive officer at Mudrex.

Till February 20, Bitcoin had surged 22 per cent in 2024 alone. However, since then, it has fallen to around $51,000. On Friday, Bitcoin dipped below $51,000 and was trading at $50,980, according to CoinMarketCap.com.

The main reason for the surge, according to experts, is the approval and subsequent listing of Bitcoin spot exchange-traded funds (ETFs) in the US on January 11.

Nine such ETFs debuted, and more than decade-old Grayscale Bitcoin Trust converted into an ETF on the same day. The accessibility of ETFs promises to widen the investor base for the token. The new funds have attracted about $9 billion so far, according to Bloomberg.

According to Parth Chaturvedi, investments lead at CoinSwitch Ventures, “The focus this week shifted towards Ethereum, as it led prices ahead of Bitcoin and crossed the crucial $3,000 level.”

It has gained around 30 per cent since the start of 2024. In the last seven days, it was up 4 per cent and was trading at $2,940 on Friday.

“Its Dencun upgrade has played a major role in its price surge, but the correction, which is being driven by Bitcoin’s dominance, has impacted it alongside altcoins such as Solana and Ripple,” added Rajagopal Menon, vice president at WazirX.

Menon also noted that Bitcoin’s sell-off may also be due to the US Fed’s indication that rate cuts may take longer than expected. “The Federal Open Market Committee’s announcements indicated that there would be no rate cuts while indicating that interest rates have been as high as they need to be for the moment,” he said.

Patel said that Bitcoin may continue to trade between $50,000 and $52,000 for some time.

“Bitcoin has not yet accumulated enough energy to make a sharp move so it is likely to trade sideways between $50,000 and $52,000 level for a while,” he said.

First Published: Feb 23 2024 | 4:06 PM IST

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