Bitcoin reached an all-time high driven by soaring demand from new US exchange-traded funds and anticipation of a decrease in the token’s supply growth, triggering an impressive resurgence in the original cryptocurrency.
Surging by up to 2.5% to $69,191.95 by 10:10 a.m. Tuesday in New York, Bitcoin has surged by approximately 62% since the beginning of 2024, outstripping the performance of global stocks and igniting optimism across the digital asset market.
Remarkably, Bitcoin’s revival can be attributed partly to an unexpected ally: the US Securities and Exchange Commission (SEC). Despite a historically antagonistic stance toward crypto, the SEC’s approval of spot-Bitcoin exchange-traded funds in early January, following a legal setback last year, has significantly broadened Bitcoin’s accessibility to mainstream investors. This move has helped the crypto sector recover from the downturn in 2022 and a series of subsequent setbacks, including the collapse of Sam Bankman-Fried’s FTX exchange.
A substantial influx of capital has flooded into ETFs issued by major investment players like BlackRock Inc. and Fidelity Investments, with net inflows exceeding $7 billion in less than two months. This surge in demand coincides with an impending reduction in Bitcoin’s supply growth, known as the halving, further fueling bullish sentiment.
Stefan von Haenisch, head of trading at OSL SG Pte, remarked, “Breaking all-time highs, coupled with the current momentum in spot ETFs and the impending halving narrative, is likely to trigger genuine FOMO among observers currently on the sidelines.”
Bitcoin’s resurgence, which began in early 2023, has propelled the total market value of digital assets to around $2.6 trillion, marking a dramatic turnaround from the industry’s nadir in November 2022.
However, this latest rally contrasts sharply with the tumultuous events of 2021, when Bitcoin reached its previous peak of $68,991.85. Following this pinnacle, Bitcoin and the wider crypto market underwent a steep decline as central banks tightened monetary policy to combat inflation, resulting in a nearly one-third drop in Bitcoin’s price by the end of 2021.
The ensuing bear market exposed widespread fraud and reckless behavior among key players in the crypto sphere, epitomized by the collapse of the TerraUSD stablecoin and Bankman-Fried’s FTX exchange. Regulatory scrutiny intensified, with figures like Bankman-Fried, Binance’s Changpeng Zhao, and TerraUSD creator Do Kwon facing legal challenges.
Despite these challenges, regulatory efforts worldwide have sought to enhance oversight of the crypto industry, with initiatives such as the European Union’s Markets in Crypto-Assets (MiCA) legislation. Notably, the involvement of financial giants like BlackRock has provided further legitimacy to Bitcoin, with the approval of its iShares Bitcoin Trust ETF signaling a significant milestone in the mainstream adoption of cryptocurrencies.
