Bitcoin’s price soared above $65,000 on Monday, hitting its highest level in two years and approaching its all-time peak. The cryptocurrency reached $65,500 at around 2:20 pm, marking an increase of 3.71 per cent.
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Its record high stands at $68,999.99, achieved in November 2021.
Bitcoin has witnessed a strong surge of nearly 50 per cent in its value this year, with much of the surge occurring in recent weeks as trading volume surged for US-listed Bitcoin funds.
What’s driving the Bitcoin rally?Â
One key driver behind the recent Bitcoin rally is the strong inflows into spot Bitcoin exchange-traded funds (ETFs) and consistently positive investor sentiment leading up to the upcoming Bitcoin halving event.
Raj Karkara, COO of ZebPay, a leading Indian crypto firm, said, “Bitcoin’s recent surge underscores the asset’s remarkable resilience and widespread adoption. This upward momentum, witnessed for the first time in over two years, is fuelled by unprecedented inflows into spot Bitcoin exchange-traded funds (ETFs) and consistently positive investor sentiment leading up to the upcoming Bitcoin halving event.”
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“On February 29, Spot Bitcoin ETFs had an inflow volume of $896 million which is close to 4 times the outflow volume. Blackrock, Grayscale and Fidelity have contributed to more than 80 per cent of all the Bitcoin ETF volumes as of February 29,” he added.Â
Kakara went on to say that the macroeconomic conditions are favorable for the crypto market, leading to sustained upward momentum in the near future. “ZebPay remains highly bullish on both the short and long-term prospects of Bitcoin and the broader crypto market,” he added.Â
It may be noted that the approval of spot bitcoin exchange-traded funds in the United States earlier this year has attracted new large investors and reignited enthusiasm and momentum similar to the run-up to record levels in 2021.
The cryptocurrency rally has coincided with record-breaking performances in stock indexes and decreasing volatility gauges in equities and foreign exchange.
“In a world where Nasdaq is making new all-time highs, crypto is going to perform well as bitcoin remains a high-volatility tech proxy and liquidity thermometer.
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We are back to a 2021-style market where everything goes up and everyone is having fun,” said Brent Donnelly, trader and president at analysis firm Spectra Markets.
