Bitcoin outpaces equity market, hits 2-year high; Sensex, Nifty 50 lag behind the digital asset
Bitcoin price hit the $50,000 level for the first time in more than two years buoyed by expectations of interest rate cuts later this year and last month’s regulatory nod for US exchange-traded funds (ETF) designed to track its price.
The world’s largest cryptocurrency has risen 16.3% so far this year and on Monday it touched its highest since December 27, 2021.
At 1:30 pm, bitcoin price was up 3.67% on the day at $50,025. Bitcoin prices have tripled since the beginning of last year, rebounding from a 64% decline in 2022. It hit an all-time high of nearly $69,000 in November 2021.
On the contrary, the Indian equity market began this year on a weak footing. The Sensex has fallen 1.4%, while the Nifty 50 is down around half a percent in 2024 so far. The weakness in the Indian stock market is largely due to the outflow of foreign portfolio investors’ (FPI) money and expensive valuations.
The FPIs have sold Indian equities worth more than ₹28,400 crore so far this year on rising bond yields in the US amid expectations of a delay in interest rate cuts by the US Federal Reserve.
Analysts expect the rally in the prices of cryptocurrencies may continue going ahead led by the impact of Bitcoin Spot ETFs and market’s anticipation for Bitcoin Halving in May.
Also Read: Bitcoin surges to $50,000 for the first time since 2021 on ETF demand
“From 1st Jan 2024 to Jan 10th (Bitcoin ETF approval date), BTC trading volumes grew from $16B to $50B - a 300% increase. This is the impact of the approved BTC ETF. However, the effects of Bitcoin Halving are yet to factor in," said Ryan Lee, Chief Analyst at Bitget Research.
Historically Bitcoin Halvings have resulted in driving BTC prices to new all-time highs (ATH) in the preceding year. The
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