Halving Supply Shortage and ETF Inflows Drive Bitcoin Price

For the first time since December 2021, Bitcoin’s price soared to an intra-day peak of $50,000 today, riding the momentum of last week’s positive surge following the introduction of exchange-traded funds (ETFs). The cryptocurrency experienced a swift 3.25% increase from an intra-day low of $47,745 on February 12, reaching a two-year zenith of $50,000. This milestone caps a week of impressive performance, with Bitcoin registering a 16% uptick.

This bullish trend is closely tied to the significant inflows into spot Bitcoin ETFs witnessed over the previous week. Spot Bitcoin ETFs garnered over $1.1 billion in net inflows, while the Grayscale Bitcoin Trust (GBTC) saw a deceleration in outflows. A report from CoinShares on February 12 highlighted that “the newly issued spot-based Bitcoin ETFs in the US attracted a net of US$1.1bn last week, cumulating to US$2.8bn in inflows since their launch on January 11.”

The surge in spot BTC ETF inflows, coupled with the rise in Bitcoin’s price, has elevated the total assets under management (AuM) to a new high of $59 billion since early 2022. Bitcoin’s last venture above the $49,000 mark was over two years ago, on December 28, 2021, when it hit $50,720, only to fall to a low of $15,522 by November 9, 2022, in the aftermath of the FTX collapse.

The recent price escalation was accompanied by a spike in cryptocurrency market liquidations, surpassing $152 million, with the figure continuing to climb at the time of reporting, as per Coinglass data. Notably, liquidations of Bitcoin short positions contributed over $45.56 million to this total, with the closing of short positions further fueling the demand surge.