Bitcoin has witnessed a surge, nearing $60,000 in its fifth consecutive day of gains, fueled by investments in new US spot bitcoin exchange-traded products. This rally marks Bitcoin’s most significant monthly gain since December 2020, according to Reuters.
The cryptocurrency surged by 4.5% to $59,244, reaching its highest value since December 2021. Investors are flocking to Bitcoin in anticipation of April’s halving event, designed to slow down the creation of new bitcoins.
Additionally, the potential for a series of rate cuts by the Federal Reserve this year has piqued investors’ interest in assets offering higher yields or greater volatility.
Ben Laidler, a global markets strategist at eToro, attributes Bitcoin’s current performance to consistent inflows into new spot exchange-traded funds (ETFs), anticipation of the April halving event, and potential Federal Reserve interest rate cuts in June.
This month, the total value of circulating bitcoin surpassed $2 trillion for the first time in two years, according to CoinGecko. The cryptocurrency’s price has doubled in four months, and interest in larger bitcoin ETFs has surged this week.
Trading volumes for the three most popular funds managed by Grayscale, Fidelity, and BlackRock have significantly increased. On Monday and Tuesday, approximately 110 million shares from these funds were traded, constituting about 51% of the 215 million shares traded in the market’s most valuable companies, including Apple, Microsoft, and Nvidia, according to LSEG data.
This substantial increase from three weeks ago, when the percentage was around 15%, indicates that the ETF effect is occurring earlier than expected, as rapid and sustained inflows into ETFs prompt advisors to sell the ETFs to clients.
LSEG data reveals a $420 million inflow into the top 10 bitcoin ETFs on Tuesday, marking a two-week high. Ethereum, the world’s second-largest cryptocurrency, rose 2.2% to $3,320, achieving a two-year high and a 47% increase in February. Investors are optimistic about US approval of spot ether ETFs, and the market appears stable with a hint of FOMO influencing purchases, according to Joseph Edwards, the head of research at Enigma Securities.
