On Thursday, Bitcoin is set to achieve its largest monthly gain in over three years. Simultaneously, a surge of cash into listed bitcoin funds is propelling a sweeping rally, putting it on track to establish a new record.
In Asia morning trade, the largest cryptocurrency by market capitalization, trading at $61,100, remained steady after reaching as high as $63,933 overnight. Additionally, its monthly gain exceeds 44%, marking the largest increase since December 2020.
It is dragging the smaller ether along for the ride; it last purchased $3,416, up 50% since February.
Tony Sycamore, an analyst at brokerage IG Markets, states that the momentum indicates “a test and likely break” of $69,000. This move would push bitcoin past its record high set in the heady days of crypto peaks in November 2021.
The head of Coinbase Global (COIN.O) stated that the exchange was experiencing an increase in traffic.
“If this were any other market, it would likely be in the ‘blow-off top – don’t go near that bubble’ category,” said Matt Simpson, senior market analyst at City Index.
“But bitcoin is back in its parabolic-rally phase, with no immediate signs of a top.”
This year, the approval and launch of spot bitcoin exchange-traded funds in the United States have opened the asset class to new investors. This move has reignited the excitement that was sapped when prices fell during the “crypto winter” in 2022.
LSEG data show that flows into the ten largest spot bitcoin ETFs totaled $420 million on Tuesday alone, the most in nearly two weeks. The three most popular, managed by Grayscale, Fidelity, and BlackRock (IBIT.O), saw volumes increase.
Ahead of April’s halving event, traders have also flooded into bitcoin. This event, occurring every four years, reduces the rate at which tokens are released by half and diminishes the rewards given to miners.
The supply of bitcoin is limited to 21 million, with 19 million already mined.
Furthermore, the prospect of the Federal Reserve cutting interest rates this year has increased investor demand for higher-yielding or more volatile assets. With foreign exchange volatility reaching a two-year low, the US equity volatility index (.VIX) is returning to pre-pandemic levels.
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