On Monday, Bitcoin soared to a new two-year high, recording $65,216, driven by a surge of investment that propelled it within striking distance of its earlier record levels. Bitcoin’s record high stands at $68,999.99, which it achieved in November 2021. The largest cryptocurrency by market value has experienced a remarkable 50 percent increase in value this year, with a significant portion of this surge occurring in recent weeks.
This surge in trading volume has been particularly notable for U.S.-listed bitcoin funds, as spot bitcoin exchange-traded funds (ETFs) were approved earlier this year. The approval of these funds has instilled newfound confidence among investors and reignited enthusiasm and momentum.
Spot Bitcoin ETFs
Analysts note that investor confidence continues to grow as the cryptocurrency’s price continues to rise. The approval of spot Bitcoin ETFs in the United States earlier this year has paved the way for new large investors to enter the market. This further contributed to the upward trajectory of the cryptocurrency’s value.
Ethereum has also experienced significant gains, fueled by speculation surrounding the possibility of exchange-traded funds for the cryptocurrency. Ether’s value has also surged by 50 percent year-to-date, reaching $3,530.90 by 9:42 GMT on Monday.
Stock index records
The surge in the cryptocurrency market coincides with record-breaking performances on stock indexes, including Japan’s Nikkei, the S&P 500, and the Nasdaq. Analysts highlight the correlation between Bitcoin’s performance and the broader market, noting that Bitcoin remains a high-volatility tech proxy, which reflects market sentiment towards tech companies and innovations. Moreover, analysts view the cryptocurrency as an indicator of overall market liquidity. In times of high liquidity, Bitcoin sees increased trading activity.
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Bitcoin halving
Investors currently await the upcoming Bitcoin halving event which could occur in April. Halving could further increase prices since it slows supply which is capped at 21 million coins. This process ensures that mining the cryptocurrency becomes more expensive over time. Historically, the value of the cryptocurrency has increased shortly after its three previous halving events. However, with the approval of Bitcoin EFTs, the cryptocurrency market expects that institutions will need to buy more of the cryptocurrency on the open market to back the flows into their funds.
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