This rally represents a recovery from the initial days following the opening of the spot ETFs, when Bitcoin experienced a drop below $40,000, eventually plummeting to $38,500 shortly after the ETFs launched on Jan. 11.

Since that moment of uncertainty, Bitcoin has shown remarkable resistance, driven by a bull market initiated in January 2023 that now appears to be entering a FOMO (fear of missing out) phase, with the price surpassing $50,000.

This uptrend is reinforced by declining outflows from the Grayscale Bitcoin Trust (GBTC) and continued inflows into new ETF products.

For example, on Feb. 8, Grayscale recorded an outflow of just 1,850 bitcoins, while the other nine ETFs added nearly 11,000 tokens to their funds. The next day, Grayscale lost 2,252 bitcoins, compared with more than 13,000 added by the ETFs.

This recovery move comes on the heels of a challenging 2022, marked by the collapse of the Terra ecosystem and the FTX crypto exchange debacle. Bitcoin closed 2022 just above $16,000, roughly 75% below its all-time high of around $69,000 in November 2021.

Despite these challenges, 2023 is shaping up to be a bull market year for cryptocurrencies, although Bitcoin’s performance was subdued for much of the year, standing at $27,000 on October 1, representing a recovery of more than 65% for 2023.

Breaching this threshold is not only evidence of Bitcoin’s ability to ride out periods of volatility, but also reinforces the perception of Bitcoin as a resilient and viable long-term asset.

With continued investment flows into Bitcoin ETFs and the attenuation of GBTC outflows, the market is showing signs of renewed confidence and growing institutional interest.

Source