Bitcoin has surged past $60,000, reaching a level not seen in over two years. This rally, characterized by a 42% gain this month, positions Bitcoin for its most significant monthly increase since December 2020. The cryptocurrency was last recorded at $61,272, marking its highest value since November 2021.
The rally has been fueled by a substantial influx of capital into new U.S. spot bitcoin exchange-traded products. Bitcoin’s price is on track for its most substantial weekly gain in a year, boasting an 18.5% increase since February 21.
Investors have shown increased interest in Bitcoin ahead of the upcoming halving event in April, designed to slow the cryptocurrency’s release. Additionally, expectations of the Federal Reserve implementing a series of rate cuts this year have contributed to investor appetite for higher-yielding or more volatile assets.
Ben Laidler, Global Markets Strategist at eToro, attributes Bitcoin’s current momentum to consistent inflows into new spot ETFs and the anticipation of the halving event in April and potential Fed interest rate cuts in June.
The total value of all Bitcoin in circulation has exceeded $2 trillion this month, reaching this milestone for the first time in two years. Bitcoin’s value has doubled in just four months.
Major Bitcoin exchange-traded funds (ETFs) managed by Grayscale, Fidelity, and BlackRock have experienced a notable increase in trading volumes. The three most popular ETFs saw a surge in shares changing hands, accounting for approximately 51% of the total shares traded in major companies such as Apple, Microsoft, and Nvidia.
The recent Coinbase investigation into an issue causing some users to see a zero balance across their accounts has not deterred the overall bullish sentiment. The cryptocurrency exchange cited a large surge in traffic.
The substantial increase in interest in ETFs is seen as an early adoption of the ETF effect, with advisors quickly introducing these investment vehicles to clients.
Data from the London Stock Exchange Group (LSEG) indicates that flows into the ten largest spot Bitcoin ETFs brought in $420 million on Tuesday alone, marking the highest inflow in almost two weeks.
The broader cryptocurrency market also experiences positive momentum, with Ethereum (ETH), the second-largest cryptocurrency, rising 3.2% to $3,353, achieving another two-year high. Ethereum has recorded a 47% gain in February.
Investors are optimistic that U.S. regulators may approve applications for ETFs based on spot Ether, Ethereum’s native cryptocurrency. The rise in Ether’s value is perceived as well-supported, reflecting a more measured environment in the market.