Bitcoin regains $1 trillion market cap as the cryptocurrency hits over two-year high

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Bitcoin surged to another more than two-year high on Wednesday, pushing its market cap back over $1 trillion as growing success of U.S. spot bitcoin ETFs turned investor sentiment more positive.

The flagship cryptocurrency was last higher by 5% at $51,929.89, according to Coin Metrics. Earlier in the morning it rose to $52,079.00, its highest level since December 2021. Its market cap, or the value of all the bitcoin in circulation, rose above $1 trillion for the first time since late 2021, according to CoinMarketCap.

Ether was last trading 5% higher at $2,758.65, after earlier touching a May 2022 high.

The moves were driven in part by increased demand for bitcoin thanks to the newly launched U.S. spot bitcoin ETFs. Some $9.5 billion of new money has entered the bitcoin market through the funds since they began trading on Jan. 11, according to data provider CryptoQuant. Outflows from the Grayscale Bitcoin ETF, which weighed on market sentiment for the earlier part of the past month, have greatly diminished.

"We estimate over 75% of new investment into bitcoin is coming from these ETFs," CryptoQuant's lead analyst Julio Moreno said in a note Wednesday. "Moreover, investment from these ETFs has increased to 2% of the total historical investment in bitcoin in just one month as measured by the realized market capitalization."

Bitcoin rallied 157% in 2023, as anticipation built for the U.S. Securities and Exchange Commission's approval of bitcoin exchange-traded funds — or ETFs — which eventually came in January this year.

The price of bitcoin dipped after the ETF approval. A new rally began in late January, as investors now look toward the "halving" — a supply-restricting event written in