Bitcoin surges above $42,000, gaining 5.7%

As of 1:09 p.m. EDT, Bitcoin's value reached approximately $42,100. Ethereum, the largest altcoin by market capitalization, also saw an increase of 2.3%, reaching $2,265. Other altcoins reported gains of up to 16%.

The overall cryptocurrency market value rose by more than 4.3%, hitting $1.62 trillion, as per CoinMarketCap data.

Tuesday saw Bitcoin plunging to $38,559, its lowest since December 2, 2023. This decline was attributed to investors' dwindling optimism and the liquidation of positions following the recent approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission. The approval, allowing investors and financial institutions to trade and hold Bitcoin without direct ownership, initially drove Bitcoin's price close to $49,000 on January 11.

However, the market also reacted to reports of FTX, a bankrupt crypto exchange firm, selling 22 million shares in Grayscale Bitcoin Trust (GBTC), valued at approximately $1 billion. Additionally, investors have reportedly sold over $2 billion worth of GBTC since early January.

Meanwhile, BlackRock's Bitcoin ETF achieved a milestone, becoming the first fund to manage assets worth $2 billion. The fund currently holds about 50,000 Bitcoins.