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Bitcoin has hit its highest price since 2021 amid record inflows to the cryptocurrency.
The latest rally saw bitcoin rise above $59,000 on Wednesday, less than $10,000 from the record high it experienced in November 2021.
It represents a remarkable turnaround for bitcoin, which was trading below $20,000 just one year ago.
The price momentum was buoyed in January by the first ever approvals in the US of spot exchange-traded funds (ETFs) for bitcoin, which brought billions of dollars worth of institutional investment to the market for the first time.
This week’s price rise coincided with a record day in trading volume for the bitcoin spot ETFs, with nine recently launched ETFs breaking their all-time daily volume record on Monday.
Other major cryptocurrencies have also seen significant gains, with Ethereum (ETH) rising by more than 50 per cent since the start of the year to set new 2024 highs this week.
The price increases have pushed the overall crypto market above $2.2 trillion – more than double its value just six months ago.
Some experts believe bitcoin’s all-time high will be tested over the coming weeks as it approaches an event known as the halving, which historically has sparked record-breaking price runs.
The bitcoin halving takes place roughly every four years and is built-in to the cryptocurrency’s underlying network. It will see rewards for mining bitcoin slashed in half, and is designed to be an anti-inflationary measure.
Currently scheduled for 19 April, investors and traders are looking to this date as the cornerstone of what has become a quadrennial price cycle for bitcoin.
Combined with the spot ETFs, some anticipate that this event will contribute to further price gains over the coming months, before another potential price correction.
“The halving event slated for April might compound the scarcity that institutional investment is fueling,” said Athena Miao, chief commercial officer at the cryptocurrency exchange BigONE.
“Considering the expected influence of the bitcoin halving event, along with the anticipation of a dovish cycle in the US macroeconomic landscape, particularly with regard to interest rate cuts, it is projected that bitcoin could surpass its previous all-time high of over $69,000 prior to the halving. Following the halving event, and bolstered by favourable macroeconomic conditions, bitcoin is anticipated to reach the $100,000 milestone towards the end of the year.”
