Bitcoin is on course for its most significant monthly surge in over three years, nearing a record high and experiencing increased investor interest driven by the approval and launch of spot bitcoin exchange-traded funds (ETFs) in the U.S. This development has attracted new investors to the cryptocurrency market, revitalizing enthusiasm that waned during the “crypto winter” of 2022.
The largest cryptocurrency by market capitalization, Bitcoin, recently surged by 3.4% to $62,205, reaching as high as $63,933 overnight – its peak since late 2021. With a monthly gain exceeding 47%, this marks its most substantial increase since December 2020. Ether, Bitcoin’s counterpart, also experienced a surge, surpassing $3,500 for the first time since April 2022 and registering a 4.3% increase at $3,466, contributing to its February rise of 52%.
Analysts, such as Tony Sycamore from IG Markets, anticipate a potential breakthrough beyond $69,000 for Bitcoin, surpassing its previous record set in November 2021. Despite comparisons to a “blow-off top” in other markets, the cryptocurrency appears to be in a parabolic rally phase, showing no immediate signs of a peak, according to Matt Simpson, Senior Market Analyst at City Index.
Coinbase Global reported a surge in traffic, while LSEG data revealed approximately $612 million flowing into the top 10 largest spot bitcoin ETFs on Wednesday. BlackRock’s iShares bitcoin trust notably received $550 million in a single day, the highest since its inception in January.
Investors are also flocking to bitcoin ahead of April’s halving event, which occurs every four years and involves cutting the rate at which tokens are released, along with the rewards for miners. Bitcoin’s limited supply of 21 million, with 19 million already mined, further contributes to its appeal.
The possibility of the U.S. Federal Reserve implementing interest rate cuts throughout the year has diminished bond yields, driving investor interest towards riskier assets, including fast-growing tech stocks and bitcoin. Geoff Kendrick, Head of Crypto Research at Standard Chartered, emphasized the impact of rate cuts on investor choices and highlighted the significance of the U.S. economy’s health and inflows into bitcoin funds.
“The ETF inflows have been huge,” Kendrick added, indicating the growing influence of exchange-traded funds on the cryptocurrency’s recent surge.
