LONDON - The total amount of money invested in bitcoin surpassed US$1 trillion on Wednesday for the first time since November 2021 as inflows to U.S. spot bitcoin exchange traded funds continued to support prices.
Bitcoin's price reached US$51,606 on Wednesday, its latest 25-month high and a rise of 4.1 per cent on the day, taking the token's market cap to US$1.005 trillion according to price platform Coingecko.
The all-time high for bitcoin's market cap was US$1.28 trillion hit in November 2021, according to Coingecko.
The world's largest cryptocurrency has risen around 20 per cent since the start of February, already set for its biggest monthly rise since October.
Investments in bitcoin make up for more than half of the US$2.01 trillion parked in the overall cryptocurrency market which includes ether and other digital coins.
Strong inflows to new U.S. listed ETFs have driven some of the price action in recent weeks, say analysts, and capital flows into the 11 U.S. spot bitcoin ETFs increased to US$1.64 billion in the week to Wednesday, LSEG Lipper data showed.
The previous five trading sessions saw inflows of US$409 million to the products, which received regulatory approval and began trading in January.
"Whether this pace will be sustained remains to be seen but in crypto, price often drives flow," said analysts at crypto liquidity provider B2C2.
"One has to imagine that if there are more days like the last few, large inflows will be met by further price rises for spot (bitcoin)."
CRYPTO-LINKED STOCKS JUMP
Shares of U.S.-listed cryptocurrency companies also gained before the bell on Wednesday, with exchange Coinbase climbing 7 per cent, while miners Riot Platforms and CleanSpark gained nearly 9 per cent and 16 per cent, respectively.
Bitcoin had hit an all-time high of US$69,000 in November 2021, before struggling for much of 2022 and the first part of 2023, weighed down by monetary tightening by global central banks, and a slew of high profile failures at crypto companies, including leading exchange FTX.
But in the last few months, hopes of a soft landing for the economy and the launch of spot bitcoin ETFs have helped sentiment. The ETFs have been touted as a game-changer for the industry, already known for its appeal to retail traders, since investors can now have exposure to bitcoin without directly holding the asset.
Second-largest token ether, which underpins the ethereum network, was last up 4.1 per cent at US$2,742 its highest since May 2022. - Reuters