LONDON: The total value invested in bitcoin surpassed $1 trillion on Wednesday for the first time since November 2021 as inflows to US spot bitcoin exchange traded funds continued to support prices.
Bitcoin’s price reached $51,902 on Wednesday, its latest 25-month high and a rise of 4.7% on the day, taking the token’s market cap to $1.017 trillion according to price platform Coingecko.
The all-time high for bitcoin’s market cap was $1.28 trillion hit in November 2021, according to Coingecko.
The world’s largest cryptocurrency has risen around 20% 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 $2.01 trillion parked in the overall cryptocurrency market which includes ether and other digital coins.
Strong inflows to new US listed ETFs have driven some of the price action in recent weeks, say analysts, and capital flows into the 11 US spot bitcoin ETFs increased to $1.64 billion in the week to Wednesday, LSEG Lipper data showed.
The previous five trading sessions saw inflows of $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).”
Shares of US-listed cryptocurrency companies also gained before the bell on Wednesday, with exchange Coinbase climbing 13%, while miners Riot Platforms and CleanSpark gained nearly 11% and 17%, respectively.
Bitcoin had hit an all-time high of $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 4.8% at $2,761 its highest since May 2022.