Bitcoin’s ascent persisted on Wednesday, catapulting beyond the $60,000 threshold for the first time since November 2021.
The value of the premier cryptocurrency surged by 7% to reach $61,064.20, as reported by Coin Metrics. Earlier, it peaked at $61,359.00. Presently, it hovers just shy of its all-time pinnacle of $68,982.20.
With the record within grasp, the market’s determination to witness a reevaluation of this level is heightened. Bitcoin has surged nearly 20% within this week alone, following a brief hiatus in the ongoing rally of the year. As of now, its surge for 2024 exceeds 40%.
Antoni Trenchev, cofounder of crypto exchange Nexo, noted the likelihood of encountering resistance as bitcoin approaches $69,000. However, he highlighted that surpassing the $60,000 milestone is likely to stimulate the interest of investors who had refrained from participating in this year’s rally, especially retail investors. JPMorgan observed a resurgence in their interest in cryptocurrencies this month following a pause in January.
Investors anticipate a new peak this year, buoyed by the introduction of ETFs, which have rendered the asset class more accessible to institutional investors. Furthermore, the upcoming halving event in the network, historically indicative of substantial rallies in the ensuing months, adds to this anticipation.
“Bitcoin demand is intersecting with increasingly constrained supply,” remarked Zach Pandl, head of research at Grayscale Investments. He further elaborated, “The new U.S. spot bitcoin ETFs have drawn an average of $195 million per calendar day in February, whereas the Bitcoin network currently produces [about] 900 coins per day — or about $54 million worth of bitcoin, assuming a price of $60,000.”
He continued, “Given the approaching Bitcoin halving in April, issuance will fall by half — the equivalent of 450 coins… There is simply not enough bitcoin to accommodate all the new demand, and so natural supply/demand dynamics are driving prices higher.”
The halving, a preordained event in the Bitcoin protocol, slashes the Bitcoin mining reward by half to curtail the supply. The forthcoming halving is slated for April.
This surge uplifted Bitcoin-related equities as well. Shares of crypto exchange Coinbase surged by over 5%, while bitcoin proxy Microstrategy witnessed an 8% leap. Prominent miners such as CleanSpark and Marathon Digital each registered an increase of more than 4%.
