Over the past week, Bitcoin (BTC) has risen from $51,728 to a second all-time high of $64,000, a stunning rise that defied many analysts’ expectations. As the cryptocurrency market continues to heat up, Wall Street giants have also smelled the bull market and begun to take action. However, the U.S. government made a "weird" move before Bitcoin soared.
Data on the chain shows that at around 1:39 pm Eastern Time yesterday (around 0:39 am Beijing time), that is, before the price of Bitcoin soared past $64,000, a wallet where the US government had seized funds transferred 1 Bitcoin. . Less than half an hour later, the remaining 2,817 BTC in the wallet were also transferred, with the total value of this transfer being approximately $173 million.
Then, another wallet, containing approximately 12,300 BTC, first transferred 0.01 BTC to an unknown address, and then all the rest of the Bitcoins were transferred out, worth approximately US$750 million. Finally, the Bitcoins transferred out from these two wallets The total value of Bitcoin is approximately $923 million, and the funds in these wallets were seized from the hackers who attacked Bitfinex in 2016.
Since the U.S. government is currently one of the largest Bitcoin whales in the world, how the authorities handle these Bitcoins also affects the hearts of many investors. The U.S. government’s sudden transfer of BTC was also seen by many as a signal to prepare for a sell-off. It is still unknown whether Bitcoin’s sharp decline after reaching $64,000 is really related to it. However, the U.S. Department of Justice responded that the transfer of nearly $1 billion in Bitcoin seized from Bitfinex hackers was for legitimate law enforcement purposes.
Because Bitcoin's rise has been too sudden, the market is curious about the main factors driving this rise. James Butterfill, director of research at CoinShares, said: In the past, Bitcoin price movements have been closely correlated with interest rate cut expectations. However, with the listing of U.S. Bitcoin spot ETFs, there has been a clear divergence in Bitcoin’s price trends, and these ETFs have greatly affected Bitcoin’s recent price trends.
Currently, only about 900 Bitcoins are produced every day, but the newly launched ETF in the United States requires about 2,800 Bitcoins every day (meaning that the demand for Bitcoin exceeds the supply by three times). This has resulted in a 28% reduction in Bitcoin reserves on exchanges since 2020, highlighting that the Bitcoin market is experiencing a significant demand-side shock.
Despite the ambiguous attitude of the U.S. government towards Bitcoin, the market activity of Bitcoin spot ETFs promoted by BlackRock, Fidelity and other major banks continues to rise, quickly becoming the second largest single commodity ETF in the U.S. market.
Bloomberg analyst James Seyffart tweeted that there are currently four U.S. Bitcoin spot ETFs with asset management scale exceeding US$2 billion, namely Grayscale’s GBTC, BlackRock’s IBIT, Fidelity’s FBTC and Ark ARKB by 21Shares.
It is worth mentioning that BlackRock also recently held a private event for their top clients and industry participants, and there was a lot of exciting news at this private event. A senior BlackRock employee said: We received a lot of calls from people we never expected to receive calls from, and there may be many unexpected participants in this bull market.
Edward Snowden, the leaker of the "Prism" incident and a former defense contractor who fled the United States, also released a heavy signal yesterday. He wrote on X: "It is predicted that this year a sovereign country will be exposed to be purchasing Bitcoin. , replacing gold reserves with cryptocurrencies without publicly disclosing this fact.”
However, in this round of Bitcoin’s rise to over $60,000, retail investors’ participation was low. Analysts said: “Despite the incredible price action in Bitcoin, current data points to calm retail investors. This suggests that institutional investors may dominate this stage, with ETFs being viewed as potential accumulation vehicles.”
The top cryptocurrency's rally continues amid an influx of funds, fueling a "fear of missing out" mentality among investors who are looking forward to Bitcoin's all-time high of $69,000. Investors are awaiting the mining reward “halving” expected to occur in April, a situation that has historically been positive for Bitcoin prices. In addition, the prospect that the Federal Reserve may cut interest rates this year has stimulated investor interest in higher-yielding or more volatile assets.
Summarize
The cryptocurrency market is experiencing a bull run unlike any before as the price of Bitcoin surges. This bull market may attract many unexpected sovereign countries and institutions to participate. At the same time, the rise of Bitcoin spot ETFs will become an important milestone in the history of cryptocurrency evolution, providing more investors with opportunities to participate in the cryptocurrency market.
