Bitcoin price has exceeded $60,000 for the first time in two years. Chesnot—Getty Images
Bitcoin rose again this week after passing the psychologically important $50,000 milestone on February 12, trading at around $61,400 just before noon ET on Wednesday, leading to a sharp rise in the crypto market. is in the midst of a serious uptrend.
The breakout pushed Bitcoin's price to its highest since November 2021, the peak of the previous crypto boom, when the top cryptocurrency hit an all-time high of about $69,000.
Bitcoin is notorious for its high volatility, and there is rarely a single factor that explains periodic spikes and crashes, but in the case of this rally, stock exchanges' approval of Bitcoin ETFs A series of inflows of institutional investor money are pushing up demand. and the Exchange Committee in early January.
With these approvals, traditional financial industry giants, most notably BlackRock and Fidelity, have entered the Bitcoin space. On Tuesday alone, BlackRock's industry-leading iShares Bitcoin ETF (IBIT) received $520 million in new inflows, as many of the company's affiliates offered the cryptocurrency to their customers for the first time. brought about.
“Bitcoin demand is colliding with increasingly tight supply. New U.S. spot Bitcoin ETF attracted an average of $195 million per calendar day in February,” says the emerging industry. said Zach Pandle, head of research at Grayscale, another major company. “There is not enough Bitcoin to accommodate all the new demand, so the natural supply and demand relationship is driving the price up.”
Pandor also pointed to the impending “halving,” a once-in-four-year event in which the daily new supply of issued Bitcoin is cut by 50%, as a reason for the surge in demand. . The next halving, which will reduce the amount of new coins issued per day from about 900 to 450, is expected to occur around April 19th.
In the current bull market, Bitcoin is up about 40% since the beginning of the year, which is a far cry from the second half of 2022, when the price of Bitcoin plummeted to about $16,000 following a number of scandals, including the bankruptcy of scammer Sam. It creates an atmosphere in the industry. Bankman Freed FTX.
As with past booms, Bitcoin's current rally has coincided with a surge in other cryptocurrencies. That includes smart contract platform Ethereum, the second-largest cryptocurrency by market capitalization, which is trading around $3,300 after falling to near the $1,000 mark in 2022.
A resurgence in the crypto bull market is likely to put pressure on regulators. Regulators sought to advance the Biden administration's policies to rein in the industry, but faced setbacks in court. Most notably, the appellate panel forced the SEC to take steps toward approving Grayscale's cryptocurrency. I applied for an ETF last summer.
