Bitcoin Surges Toward Record High: Key Factors Behind the Rally

With a two-year high and a move toward its all-time top, the price of Bitcoin surged past $65,000 on Monday. At around 2:20 PM, the cryptocurrency hit $65,500, a gain of 3.71%. It reached its highest point in November 2021, which is $68,999.99.

This year, the value of Bitcoin has increased significantly—nearly 50%—with the majority of the increase happening in the last few weeks due to a spike in trading volume for US-listed Bitcoin ETFs.

The current surge in Bitcoin prices may be attributed, in part, to the substantial inflows into spot Exchange-traded funds (ETFs) and the persistently optimistic feeling among investors in anticipation of the impending Bitcoin halving event.

"On February 29, the inflow volume for Spot Bitcoin ETFs was $896 million, about four times the outflow amount. As of February 29, more than 80% of all Bitcoin ETF volumes came from Blackrock, Grayscale, and Fidelity," he continued.

The Macroeconomic environment is favorable for the cryptocurrency market, According to Kakara, and this will result in a prolonged upward momentum in the foreseeable future. "ZebPay remains highly bullish on both the short and long-term prospects of Bitcoin and the broader crypto market,"

It should be mentioned that the United States' legalization of spot bitcoin exchange-traded funds earlier this year has drawn new big investors and rekindled the same excitement and energy that led to record highs in 2021.

The recent surge in cryptocurrencies has been accompanied by record-breaking results in stock indexes and declining measures of volatility in foreign exchange and stocks.

Cryptocurrency will do well in a world where the Nasdaq is setting new all-time highs and Bitcoin continues to be a high-volatility tech proxy and liquidity thermometer.

The market is once again behaving like 2021, with everyone enjoying themselves and everything rising," said Brent Donnelly, president and trader at Spectra Markets.

Why Is the Price of Bitcoin Increasing?

Following a week of consolidation, demand and momentum traders took positions, which led to an increase in the value of bitcoin. Experts claim that additional variables, such as spot inflows of Bitcoin ETFs into US funds and the general excitement around the crypto asset class, contributed to the greater price of Bitcoin.

After the halving event in April, which was intended to halt the Cryptocurrency's production, traders made investments in Bitcoin. Additionally, a string of rate reductions by the Federal Reserve contributed to Bitcoin's upward trend.

Because of its limited number of 21 million coins, Bitcoin is a desirable substitute for people who want to protect their capital.

Large amounts of treasury have been allocated to Bitcoin by organizations like Tesla, Square, and MicroStrategy, demonstrating their faith in the cryptocurrency's long-term potential as a hedge against inflation and currency depreciation.