Bitcoin’s 2024 has gotten off to a rocky start—despite the approval of several long-awaited exchange-traded funds that were supposed to bolster its institutional legitimacy. But things are looking up, with Bitcoin back above $45,000 per coin.
The price of Bitcoin (BTC) is now priced at $45,395, according to CoinGecko data, having jumped nearly 4% in the past day and by more than 5% in the past week.
So, what’s causing the surge? Analysts tell Decrypt that a number of factors—including hoarding by “whales”—are leading the asset to edge higher.
BTC took a somewhat surprising hit following the approval of 10 Bitcoin ETFs in January. After briefly touching $49,000, the asset nosedived after one of the funds, Grayscale, started shifting large amounts of its crypto to Coinbase.
This was because prior to Grayscale’s Bitcoin Fund ETF conversion, it operated like a closed-end fund, and investors had to hold their shares for at least six months before cashing out. When it became an ETF in January, lots of investors were keen to redeem their shares and cash out.
Grayscale, as a result, sold huge amounts of BTC, leading to a price decrease. At one point, it was trading below $39,000.
But that sell-off looks to be over and BTC is on the up again—in part to big holders snapping up the asset.
CryptoQuant’s head of research, Julio Moreno, said that “prices found a bottom as sell pressure was exhausted once short-term holder unrealized profit margins became zero,” but that more “whales” were buying BTC this year. He added that their total holdings are now at the highest since November 2022, at 3.9 million BTC.
“Whales” are typically characterized as investors who hold 1,000 or more BTC and don’t touch it for years, sitting on astronomical gains as a result. Big holders of the cryptocurrency buying more digital coins pushes the price up.
But this isn’t the only factor. OANDA senior market analyst Craig Erlam told Decrypt there’s currently “plenty of appetite for tech,” and that is leading investors to eye-up both companies on the Nasdaq and crypto.
While head of research at CoinShares James Butterfill added that a possibility was also ETF issuers buying more BTC.
BTC ETFs have been a roaring success since their launch in January. The investment vehicles, which track the price of the cryptocurrency, have experienced large inflows, with current Bloomberg data showing that for nine days straight, cash has entered the funds.
Edited by Ryan Ozawa.