Bitcoin rises above $50,000 amid slowdown in selling of Grayscale's GBTC fund

Bitcoin's price broke through the $50,000 mark on Monday amid ongoing signs that the selloff in Grayscale Investments' spot fund could be nearing an end.

"Bitcoin is now poised to achieve a new year-to-date high. This uptrend coincides with a period of reduced outflows from GBTC and a general increase in inflows into digital asset funds," Bitfinex analysts said in a report.

"Newly launched bitcoin ETFs, not including Grayscale's GBTC, now hold over 192,000 BTC, surpassing MicroStrategy's 190,000 BTC, with inflows exceeding $1 billion in less than a month," they added.

Bitcoin's price rose to the highest level seen since December 2021 on Monday. It was trading for $50,260 at 12:38 p.m. ET, an increase of 4.1% over the previous 24 hours.

Bullish outlook

The Bitfinex analysts said long-term bitcoin holder dynamics suggest a bullish outlook for the market.

"These inflows coupled with the impending 2024 bitcoin halving and the sustained high levels of illiquid supply, with more than 70% of bitcoin in the hands of long-term holders, paint an exceptionally bullish picture for BTC price movements," they said.

They noted that a "sell the news" price decline expected by some after the approval of multiple spot bitcoin ETFs in January was less severe than anticipated.

"BTC did not reach the expected lows. Realized price metrics across diverse investor cohorts continue to indicate that we are still in the early stages of a bull market. These indicators suggest that the long-term trajectory for the year should see prices trending upwards," the Bitfinex analysts added.