Bitcoin nears $60,000 for first time in over 3 years

The world’s largest cryptocurrency, bitcoin, surged for a fifth day on Wednesday, February 28, 2024, to near $60,000, which would mark its largest monthly rally since December 2020.

It was buoyed by flows into new U.S. spot bitcoin exchange-traded products that have driven it up nearly 40 per cent in February.

Bitcoin was last up 4.5 per cent at $59,244, its highest since December 2021.

Traders have poured into bitcoin ahead of April’s halving event – a process designed to slow the release of the cryptocurrency. In addition, the prospect of the Federal Reserve delivering a series of rate cuts this year has fed investor appetite for higher-yielding or more volatile assets.

“Bitcoin is being driven by the support of consistent inflows into the new spot ETFs and outlook for April’s halving event and June’s Fed interest rate cuts,” Reuters quoted Ben Laidler, global markets strategist at retail investment platform eToro, as saying.

The value of all the bitcoin in circulation has topped $2 trillion this month for the first time in two years, according to crypto platform CoinGecko, while the price of the token itself has doubled in just four months.

Bitcoin rises above $57,000 for first time in 2 years

The bigger bitcoin exchange-traded funds (ETFs) have seen a definite pickup in interest this week.

The three most popular, run by Grayscale, Fidelity and BlackRock, have seen trading volumes surge.

On Monday and Tuesday, around 110 million shares in the biggest three changed hands, about 51 per cent of the 215 million shares traded in the market’s most valuable companies – Apple, Microsoft, and Nvidia, according to LSEG data.

Three weeks ago, this percentage was closer to 15 per cent.

“Essentially, we’re seeing the ETF effect ahead of schedule. Inflows into them stepped up quickly last week and have been sustained, and we think it’s reflective of advisors getting out there very quickly to start selling the ETFs to clients,” Joseph Edwards, head of research at Enigma Securities, said.

LSEG data showed flows into the 10 largest spot bitcoin ETFs brought inflows of $420 million on Tuesday alone, the most in almost two weeks.

Crypto investor and software firm MicroStrategy earlier this week disclosed it had recently bought about 3,000 bitcoins for $155 million, while social media platform Reddit also said in a regulatory filing it had bought small amounts of bitcoin and ether.

Meanwhile, the world’s second-biggest cryptocurrency, ether, which underpins the Ethereum blockchain network, rose 2.2 per cent to $3,320, having hit another two-year high earlier in the day.

The price has risen 47 per cent in February, the biggest monthly gain since a 70 per cent rally in July 2022.

The Star