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Bitcoin rate exceeded $60 thousand for the first time since 2021, USDT capitalization increased by 50% over the year. What does this mean for the crypto market?

The Bitcoin (BTC) rate has once again updated its annual maximum, exceeding $60 thousand on the Binance exchange paired with the USDT stablecoin, this is the maximum since November 2021. The historical maximum of the Bitcoin rate was reached on November 10, 2021 at $68.7 thousand. BTC capitalization exceeded $1.16 trillion, according to CoinGecko. The coin has been growing for the third day with virtually no pullbacks or noticeable corrections.

Experts attribute the rally of the first cryptocurrency to growing demand from Bitcoin ETFs. Two months after launch, the assets of the nine leading spot Bitcoin exchange-traded funds (ETFs) exceeded 300 thousand BTC, or $17 billion. Including the Grayscale Bitcoin Trust (GBTC), their assets under management exceeded 748 thousand Bitcoins, worth $43 billion. Trading volume in spot bitcoin exchange-traded funds (ETFs) in the United States exceeded $2 billion on February 27, marking the second day the funds have seen record turnover since their launch in January. More than $1.3 billion went to an ETF from BlackRock, which already manages more than 136 thousand bitcoins worth more than $7.5 billion. According to the forecast of the head of CryptoQuant, if the current trend in the influx of funds into exchange-traded funds (ETFs) for bitcoin continues, then the price of the first cryptocurrency could reach $112 thousand by the end of 2024.

The rate of the second cryptocurrency by capitalization – Ethereum (ETH) – also updated its annual maximum; Ethereum is trading above $3,300 with a capitalization of more than $398 billion. All large crypto assets from the top 10 by capitalization also increased in price over the day by an average of 4–10%. The capitalization of stablecoins reached $140 billion, which was the highest since December 2022. The growth is driven by the recovery of USDC, the second-largest stablecoin, and the steady growth of USDT issuer Tether, the market leader, writes CoinDesk. The capitalization of the largest stablecoin Tether (USDT) reached $98 billion, which is almost 50% more than at the beginning of 2023. The capitalization of its main competitor, the stablecoin USDC, the issuer of Circle, has grown from $24 billion to $28.5 billion over the past two months. Our analysts attribute the increase in demand for USDC to the launch of a Bitcoin ETF in the United States.

The stablecoin market began to recover in early November 2023, after a decline of one and a half years. Since then, its market capitalization has grown by 12%, or about $15 billion, with about $10 billion of that growth occurring at the beginning of the year. Changes in stablecoin market capitalization serve as a kind of “thermometer” for assessing whether funds are flowing into or out of the cryptocurrency ecosystem. The second-largest stablecoin, USDC (USD Coin), is gradually regaining the market share it lost last year. At the end of 2023, USDT (Tether) dominated in terms of capitalization growth among stablecoins, analysts note, but at the beginning of 2024, USDC began to overtake it. Since the beginning of the year, its capitalization has grown by 10%, which is twice as much as USDT. Experts attribute this trend to an increase in liquidity and an influx of new users to the cryptocurrency market. Many of these funds use the US crypto exchange Coinbase for Bitcoin transactions, which increases demand for USDC.

Bitcoin exchange-traded funds (ETFs) in the US and the Bitcoin rally this year are fueled by money from American investors, for whom USDC is the most preferable, Coindesk notes. An additional incentive for the growth of the stablecoin could be the relisting of some trading pairs on Binance with USDC at the end of 2023. USDT remains the dominant stablecoin on non-US exchanges, including Binance. Head of the company issuing the largest stablecoin Tether (USDT) We expect greater integration of cryptocurrencies with traditional finance amid growing interest from hedge funds and corporations in the first cryptocurrency.

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