April 19, 2024
Bitcoin's at $61,253, Surges with Largest Single-Day Gain
Bitcoin price today

Bitcoin’s at $61,253, Surges with Largest Single-Day Gain

Thursday, February 29, 2024: The Bitcoin price holds steady at $61,253. Notably, Bitcoin (BTC) witnessed an impressive 9.5% surge the previous day, marking its most substantial single-day percentage gain since October 23. Soaring to $64,000 on various exchanges, Bitcoin achieved its highest value since November 2021.

This rapid increase from Monday’s low, hovering around $51,500, is widely credited to the escalating interest of Wall Street in spot-based Bitcoin exchange-traded funds (ETFs). Reflecting the broader market, the Index displayed a growth of over 10% within the week. Analysts from Bitfinex project a sustained rally in the coming months, potentially pushing Bitcoin prices into six figures.

They state, “Our analysis forecasts a conservative price objective of $100,000-$120,000 to be achieved by Q4 2024, and the cycle peak to be achieved sometime in 2025 in terms of total crypto market capitalization.” The advent of ETFs has generated “passive demand,” as investors now perceive Bitcoin as a store of value rather than a volatile tradable asset, as outlined by the analysts.

Renowned technical analysis expert Peter Brandt earlier this week suggested that Bitcoin could reach a peak of $200,000 by September 2025. While these projections offer optimism for directional traders, non-directional traders can also find opportunities in the market. Cash and carry arbitrage, a market-neutral strategy exploiting price disparities in spot and futures markets, now provides a return three times higher than the yield on the 10-year U.S. Treasury note, commonly known as the risk-free rate.

The cash and carry arbitrage involves a long position in the spot market coupled with a short position in futures when futures trade at a premium to spot prices. As futures approach expiration, the premium diminishes, and on settlement day, futures align with spot prices, delivering a relatively low-risk return to arbitrageurs.

Glassnode, a blockchain analytics firm, reported that the Bitcoin cash and carry strategy, involving three-month futures, currently yields over 14%. This surpasses the 10-year Treasury yield of 4.27% by more than three times and is 2.8 times greater than the 1-year Treasury yield of 5%. The enhanced yield potential may attract more capital to the cryptocurrency market.

Image by fabrikasimf on Freepik

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