Bitcoin experienced a remarkable rally on Monday, reaching a two-year high and surpassing $65,000, inching closer to its previous record levels. The cryptocurrency hit a session peak of $65,537 during European trading, following earlier gains in Asian markets. Currently, it is up 4% at $65,045, marking a 50% increase in value for the year. Bitcoin’s resurgence to new highs has been particularly prominent in recent weeks, coinciding with a surge in inflows into US-listed bitcoin funds.
The approval of spot bitcoin exchange-traded funds (ETFs) in the United States earlier this year played a pivotal role in reigniting investor interest and driving momentum. The launch of these ETFs has attracted new large investors, contributing to the cryptocurrency’s upward trajectory. Markus Thielen, Head of Research at crypto analytics firm 10x Research in Singapore, noted that investor confidence is growing as the price continues to rise.
In the week ending March 1, net flows into the ten largest US spot bitcoin funds totaled $2.17 billion, with over half of that amount directed to BlackRock’s iShares Bitcoin Trust, according to data from LSEG. The approval of bitcoin ETFs has not only impacted bitcoin but also had a spillover effect on other cryptocurrencies. Ethereum, Bitcoin’s smaller rival, has seen its value surge by 50% year-to-date, reaching two-year highs and trading at $3,518 on Monday.
The broader market context, with record-breaking performances in stock indexes like Japan’s Nikkei, the S&P 500, and the Nasdaq, has contributed to a favorable environment for bitcoin and other cryptocurrencies. Brent Donnelly, a trader and president at analysis firm Spectra Markets, likened the current market dynamics to the exuberance of 2021, where various assets experienced upward trends, stating, “We are back to a 2021-style market where everything goes up, and everyone is having fun.”
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