Crypto prices surged on Thursday as Bitcoin and ether headed for a prosperous month.
“Bitcoin was last higher by more than 4% at $62,901.93 on the final day of February,” according to Coin Metrics. On Wednesday, it peaked at $64,000 before a wave of long liquidations prompted a pullback to around $60,000. Ether also saw significant gains, advancing more than 6% to $3,483.33 on Thursday.
These two leading cryptocurrencies experienced notable upward momentum in February following a flat performance in January. Bitcoin has soared by 47% this month, while Ether has surged by over 50%.
February proved to be a triumphant period for bitcoin ETFs, with a record $677 million in daily net inflows recorded on Wednesday alone, marking the third consecutive day of inflows surpassing $500 million. Initially, outflows from the Grayscale Bitcoin ETF (GBTC), which had a head start as the Grayscale Bitcoin Trust, had exerted downward pressure on the bitcoin price. However, these outflows have now subsided.
Investors attribute the explosive gains witnessed in February to Bitcoin’s supply and demand dynamics. Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, specifically pointed to the new ETFs and the upcoming Bitcoin halving as driving factors.
“We’ve seen over $2 billion coming into the various bitcoin ETFs so there’s been this need to access more supply of bitcoin to build these ETFs and that ends up driving prices up, particularly in the near term,” she explained.
“The second reason why you might be getting some extra momentum in the price over the last couple of days is the upcoming halving,” she added. “Historically, the halving has led to bitcoin prices increasing … past performance is not indicative of future performance, but I do think there’s this belief that the halving process will result in the same level of price appreciation.”
The halving is a mandate in the Bitcoin code to cut the reward for mining Bitcoin in half, thereby reducing the supply of Bitcoin every few years and creating a scarcity effect. The next one is expected this April.
