The cryptocurrency market experienced a surge today, with the global market capitalization rising by 5.8% to reach $2.51 trillion on March 4. This upward movement has resulted in Bitcoin’s market dominance increasing to 53.3% as the leading cryptocurrency’s market capitalization reached a new all-time high.
Bitcoin has seen an 8.5% rally in the past 24 hours, reaching an intra-day high of $68,602 on March 4. Other top-cap altcoins such as Ether, Cardano, XRP, and Dogecoin have also experienced upward momentum.
The main driving factors behind the current state of the cryptocurrency market are as follows:
1. Bitcoin’s market capitalization reaches a new all-time high: Bitcoin’s market capitalization has reached a record high against the dollar. The rally to $68,602 on March 4 led to a total market value of $1.33 trillion for Bitcoin. The last time Bitcoin’s market cap reached $1.3 trillion was over two years ago, on November 10, 2021, when it reached $68,990.
2. Upcoming supply halving: Bitcoin’s continuous price rally has been attributed to the upcoming supply halving, which is expected to reduce miner rewards by 50%. Data from CoinMarketCap shows that there are 6,870 blocks remaining until the halving, which is approximately 48 days away.
3. Approval of spot exchange-traded funds (ETFs): The approval of spot ETFs in the United States has contributed to Bitcoin’s price growth as these ETFs continue to attract more capital.
In addition, the cryptocurrency market has witnessed the second-largest weekly inflow of $1.8 billion into crypto products. According to CoinShares’ Digital Asset Fund Flows Weekly Report, Bitcoin accounted for 94% of these inflows, with U.S.-based funds dominating with net inflows totaling $1.88 billion. This influx of institutional capital into Bitcoin has coincided with increasing outflows from the Grayscale Bitcoin ETF.
The crypto market rally has also led to a wave of short position liquidations, totaling over $348.2 million in 24 hours. Bitcoin short liquidations accounted for the majority of these losses, with $107.71 million in total shorts wiped out.
Despite the short-sellers’ losses, the market has seen an increase in open interest, with $3 billion added to the crypto market in the last 24 hours. This indicates heightened market activity and positive investor sentiment.
Overall, with increased institutional capital flows, the potential for a spot Ether ETF, and the upcoming Bitcoin halving, there is a strong indication that the bull market is in full swing. However, it is important for readers to conduct their own research and exercise caution when making investment decisions.