For the first time in almost two years, Bitcoin topped $60,000 on Wednesday. This was made possible by a capital inflow into new US spot bitcoin exchange-traded products, which fueled a rally that has already reached 42% this month and is on course to hit its highest monthly gain since December 2020.
Bitcoin reached its highest point since November 2021, when it achieved a record slightly around $70,000, with a recent 8% increase to $61,272. It was also on track for its biggest weekly increase in a year, with a gain of 18.5% since February 21.
Traders have flocked to bitcoin in anticipation of April's halving event, which is intended to slow down the cryptocurrency's production. Furthermore, investors' enthusiasm for riskier or higher-yielding assets has been fueled by the possibility that the Federal Reserve could lower interest rates multiple times this year.
Ben Laidler, a global markets strategist from eToro, a retail investment platform, said the motivation behind Bitcoin is the support from steady inflows into the new spot exchange-traded funds and the expectation for the halving event in April and the Fed interest rate decreases in June.
Coinbase Global, the biggest cryptocurrency exchange in the United States, announced on Wednesday that it was looking into a problem that caused some users to see a zero balance on all of their accounts. The CEO of Coinbase, Brian Armstrong, said in another post on X that the cryptocurrency exchange was experiencing a significant increase in traffic.
For the first time in two years, the total value of bitcoin in circulation has surpassed two trillion dollars this month, according to cryptocurrency platform CoinGecko, while the token's price has doubled in only four months.
There has been a noticeable increase in interest this week in the larger bitcoin exchange-traded funds.
Trading volumes at the three biggest names, operated by Grayscale, BlackRock, and Fidelity, have increased.
Based on LSEG data, on Monday and Tuesday, over 110 million shares in the top three changed — almost 51% of the 215 million shares traded in the three most valued companies on the market: Apple, Nvidia, and Microsoft.
It was around 15% three weeks ago.
The 10 biggest spot bitcoin exchange-traded funds saw inflows of $420 million on Tuesday alone, the highest amount in over two weeks, according to LSEG data.
This week, cryptocurrency investor and software company MicroStrategy said that it had recently purchased over 3,000 bitcoins for $155 million, while Reddit, a social media platform, revealed that it had purchased small amounts of ether and bitcoin.
In the meantime, ether, the second-largest cryptocurrency in the world and the basis of the Ethereum blockchain, increased 3.2% to $3,353 after reaching its two-year peak earlier in the day. In February, its price increased by 47%.
Investors are expecting that proposals for exchange-traded funds based on spot ether will be approved by US regulators.
According to Edwards of Enigma Securities, the gain felt pretty well supported. While there's no frantic vibe to who's investing and why, he says there is some "fear of missing out" at the moment.