Bitcoin on Thursday surged towards its largest monthly gain in over three years, driven by intense trading activity and edging closer to a record high. It was seen hovering near the $64,000 mark for the first time in approximately 27 months.
The largest cryptocurrency by market capitalisation saw an increase of about 11 percent, reaching a total valuation of $1.24 trillion. With a monthly increase of over 44 per cent, this marks its most significant surge since December 2020.
Bitcoin's upward momentum is also impacting the value of the smaller cryptocurrency, ether, which recently reached $3,416, marking a 50 per cent increase in February, as well as Dogecoin, which galloped by 30 per cent in just past two days.
Bitcoin remained stable during Asian morning trade at $61,100, after reaching as high as $63,933 overnight, reported Reuters.
The surge in Bitcoin is primarily attributed to several key factors, including the long-anticipated Bitcoin halving, the approval of Bitcoin exchange-traded funds (ETFs), leading to increased institutional investments, and speculation surrounding the interest of Amazon's Jeff Bezos in the digital asset class.
Matt Simpson, senior market analyst at City Index, told Reuters, "If this were any other market, it would likely be in the 'blow-off top - don't go near that bubble' category."
He added, "But bitcoin is back in its parabolic-rally phase, with no immediate signs of a top."
Data from London Stock Exchange Group, a leading global financial infrastructure and data provider showed that the 10 largest spot bitcoin ETFs attracted $420 million in flows on Tuesday, the highest in nearly two weeks.
The three most popular ETFs, managed by Grayscale, Fidelity, and BlackRock, experienced significant increases in trading volumes.
Traders have also been flocking to bitcoin in anticipation of April's halving event. During this event, the rate at which new tokens are released is halved, along with the rewards distributed to miners. It is a recurring process that occurs every four years.
Bitcoin has surged amid rumours suggesting interest from Jeff Bezos in the digital asset class, with speculative reports indicating he may have invested billions of dollars in Bitcoin. However, neither Bezos nor his e-commerce giant Amazon has confirmed these rumours.
The supply of bitcoin is limited to 21 million, out of which 19 million have already been mined.
The anticipation of the Federal Reserve implementing a series of interest rate cuts this year has bolstered investor interest in higher-yielding or more volatile assets. Foreign exchange volatility has dropped to its lowest level in two years, and the US equity volatility index is returning to pre-pandemic levels.
Commenti