Bitcoin, the premier cryptocurrency, has been witnessing a notable surge, with its value briefly surpassing the $64,000 mark, a level not seen since November 2021. This uptick marks the second consecutive day of gains, bringing it tantalizingly close to its historical peak. The driving force behind this rally is the burgeoning demand for Bitcoin, particularly from exchange-traded funds (ETFs) in the United States, which commenced trading on January 11.
As of 9:20 a.m. Singapore time, Bitcoin had reached an impressive $64,279, though it later moderated to $63,622. The past 12 months have seen Bitcoin's value skyrocket by approximately 186%, a testament to its growing popularity and investor confidence. This bullish trend is largely attributed to the relentless demand for Bitcoin from newly launched US-listed Bitcoin ETFs, which have collectively seen net inflows amounting to a staggering $7.35 billion since their debut. Prominent players in the ETF arena, including BlackRock Inc. and Fidelity Investments, have contributed to this wave of investment.
Hayden Hughes, the co-founder of the social-trading platform Alpha Impact, notes that the current market momentum is being fueled by anticipations of continued ETF inflows. Hughes highlights that the market's movement northward, especially during periods of low liquidity like weekends, is driven by expectations that ETF inflows will persist, further propelling Bitcoin's rally.
Investor sentiment is increasingly optimistic about Bitcoin's potential to surpass its previous record high of nearly $69,000, achieved during the Covid pandemic. This optimism is bolstered by the strong demand for Bitcoin ETFs and the impending Bitcoin halving event, expected later this year. The halving, a significant event in the Bitcoin ecosystem, will reduce the reward for mining Bitcoin by half, potentially leading to a decrease in the coin's supply growth and intensifying the demand pressure.
Hughes further elaborates that crossing the psychological barrier of Bitcoin's former all-time high may require time. However, he asserts that given the factors at play, including the upcoming halving and the prevailing positive market sentiment, it is only a matter of time before Bitcoin breaches this threshold.
In the broader cryptocurrency market, other prominent tokens like Ether and Solana have also experienced gains, albeit modestly, with increases of 0.15% and 1.82% respectively on Monday. This overall positive movement in the crypto market underscores the growing investor interest and confidence in digital currencies, a trend that continues to shape the financial landscape.