Published on: 15/02/2024
In a historic leap, the market capitalization of Bitcoin, the standard front runner of the cryptocurrency world, has once again crossed the $1 trillion thresholds. This spectacular surge was stirred by the BTC price surpassing the $51,000 mark.
Lets briefly turn back to 2021, precisely November, when Bitcoin first recorded its $1 trillion market cap during a robust bull run, propelling BTC to its ephemeral all-time-high of $69,000. Simultaneously, the bullish trend seeped into the entirety of the crypto ecosystem, pushing the combined crypto market capitalization to record $3 trillion for the first time.
The picture in February 2024, shows Bitcoin’s circulating supply crisscrossing the $1 trillion line after the BTC price soared above $51,000. Currently, the circulating supply of Bitcoin stands at 19,627,443 BTC, which accounts for 93.46% of its total hard-capped supply of 21 million BTC.
The blazing bull market that has stayed sustained and the spate of Bitcoin ETF approvals in the United States have boosted positive investor sentiment. This uptick in sentiment is perceptible across other facets of the Bitcoin ecosystem. Investments in Bitcoin have seen a significant rise at both the individual and institutional levels, facilitating recent sustained price appreciation.
An intriguing aspect of Bitcoins trajectory is the potential impact of the upcoming Bitcoin halving, an event expected to escalate the market price of Bitcoin even further. Breaking it down, Bitcoin halving is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions.
Grayscale’s analysis points out a fascinating aspect — with the Bitcoin ETFs altering the cryptocurrency’s demand-supply ratio, this can ease the sell pressure inherent post halving. Currently, the rate of Bitcoin mining is 6.25 Bitcoin per block, equating to about $14 billion annually, considering the price at $43,000. To sustain the current prices, a buy pressure equivalent to this is mandatory, annually. After halving, the mining rate will fall to 3.125 Bitcoin per block, lowering the annual requirement to $7 billion, consequently lessening the selling pressure.
Interestingly, Bitcoins price carries a definitive impact on the operational expenses for miners. As we approach the halving event, the mining reward will be slashed by half to 3.125 BTC. To ensure mining remains a feasible business model, Bitcoin must sustain a high market value.
As a financial analyst, these recent developments in the Bitcoin market not only symbolize its current robust health but also highlight Bitcoins potential growth in the near future. Investors, with astute strategy and an eye on vital factors like halving and Bitcoin ETFs, can tap into this underexplored gold mine. The narrative of Bitcoin seems to be unfolding into a promising story of long-term value and sustained expansion. Today, its not just about owning a piece of crypto history, but also about steering the future of finance.