In a spectacular move for which it alone has the secret, Bitcoin has hit a new all-time high, surpassing $69,000 for the first time in its history. The previous ATH (All Time Hight) dated back to November 2021.
This meteoric rise (200% over one year and 58% over one month) is attributed to two key factors that have fuelled increased demand and renewed confidence among investors: the introduction of Bitcoin ETFs in the US and the anticipation of the next halving scheduled for mid-April.
The arrival of Bitcoin ETFs on US markets has marked a significant step towards institutional adoption of the cryptocurrency, offering investors a new route to exposure to this digital asset without the complexities associated with holding it directly. These financial instruments have opened up Bitcoin to a wider audience, including those who favour traditional investments, providing a layer of legitimacy and security that is appreciated in financial circles.
In seven weeks, net inflows into Bitcoin ETFs reached $7.3 billion, a record for ETFs across all assets.
Their approval by regulators was seen as a sign of maturity for the crypto market, boosting investor confidence and propelling the value of Bitcoin to unprecedented levels.
Alongside this, the anticipation of the halving of Bitcoin , a scheduled event that halves the reward for mining new blocks and takes place every four years, also played a crucial role in this record rise.
Historically, periods leading up to a halving have been associated with significant rises in Bitcoin's value, as investors anticipate a reduction in the supply of new Bitcoins and consequent upward pressure on prices due to the law of supply and demand. The halving scheduled for around 20 April (the date may still move by a few days) has therefore helped to fuel speculation and optimism, leading to a build-up of anticipatory buying.
This latest performance by Bitcoin highlights not only the volatility and growth potential of the cryptocurrency, but also its gradual integration into the global financial system. While debate continues over the place of Bitcoin and other cryptocurrencies in the global economy, their impact on financial markets is undeniable. Investors, both institutional and retail, are now closely scrutinising developments in this space, recognising Bitcoin not only as an investment asset, but also as a potential element of diversification and inflation protection in investment portfolios.
This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.
