Bitcoin (BTC) shot up on Wednesday, breaching the $60,000 mark for the first time since November 2021, marking a significant upswing in the world of cryptocurrency. Bitcoin’s upward journey has been consistent since September last year. The recent surge adds to Bitcoin’s impressive performance in 2024, boasting a year-to-date return of over 42 per cent, with a nearly 6 per cent gain in the past 24 hours alone.
What is Bitcoin?
Often dubbed the online equivalent of cash, Bitcoin stands as the globe’s foremost decentralised digital currency, employing peer-to-peer technology to function independently of intermediaries. With over 18 million Bitcoins currently in circulation, its popularity continues to soar.
Why is it surging, and what is next for the world’s largest cryptocurrency?
The recent rise in Bitcoin’s value is fuelled by optimism among crypto investors after the US Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in mid-January. Just yesterday, over $577 million poured into spot Bitcoin ETFs. These ETFs enable institutional trading of Bitcoin at its current price, unlike previous ones that only dealt with Bitcoin futures, a more complex investment suitable for experienced traders. According to Arshad Khan, a digital assets expert based in Dubai, Bitcoin and many leading Altcoins are experiencing a bullish rally. “There are several reasons for this,” he explained. “The upcoming halving of Bitcoin mining rewards is one of the factors.” Khan also highlighted the investor demand for Bitcoin ETFs launched by major financial institutions, stating, “This is attracting significant interest from institutions that previously showed little interest in cryptocurrencies.” He continued, “Investors are starting to recognize the use cases of certain cryptocurrencies with well-defined use cases and governance methods. Increased regulatory approvals and recognition from various government authorities are also driving cryptocurrency adoption into the mainstream.”
What is a Bitcoin ETF and what does it do?
A Bitcoin exchange-traded fund (ETF) is a financial product enabling investors to track Bitcoin’s price movements without directly owning the asset. These ETF shares are traded on traditional stock exchanges, simplifying investors’ access to the cryptocurrency market.
Will there be a price correction?
Daniel Yan, co-founder of Singaporean crypto services firm Matrixport, anticipates an imminent market correction. However, Khan believes the rally will persist before another possible price correction. Significantly, historical data shows that there have only been a very few instances where Bitcoin has surpassed the $61K value.
What about other cryptocurrencies?
Other major cryptocurrencies have witnessed substantial gains, notably Ethereum (ETH), which surpassed $3,300 as bullish momentum continued to propel the world’s second-largest cryptocurrency higher. Currently, ETH is up 2.61 per cent in the last 24 hours and over 12 per cent for the week, according to CoinMarketCap.