© Reuters. FILE PHOTO: A bitcoin is seen in an illustration photograph taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/File Photo
SINGAPORE (Reuters) – Frenzied bitcoin activity on Thursday put it on track for its biggest monthly gain in more than three years and within range of a record high, as cash flowing into bitcoin exchange-traded funds fuels a rally. overwhelming.
The largest cryptocurrency by market capitalization was steady in Asian morning trading at $61,100, having changed hands as high as $63,933 overnight. Its monthly gain is more than 44%, the highest since December 2020.
It is dragging down the smaller ether: it last bought $3,416, up 50% in February.
The momentum suggested “a test and probable breakout” of $69,000, said Tony Sycamore, an analyst at brokerage IG Markets, which would put Bitcoin beyond its record high set in the cryptocurrencies' heady peak days in November. 2021.
The head of Coinbase (NASDAQ 🙂 Global said the exchange was dealing with a surge in traffic.
“If this were any other market, it would probably be in the 'explode top, stay away from that bubble' category,” said Matt Simpson, senior market analyst at City Index.
“But bitcoin has returned to its parabolic rally phase, with no immediate signs of a top.”
The approval and launch of spot bitcoin exchange-traded funds in the US this year opened the asset class to new investors and reignited enthusiasm that fizzled when prices collapsed in the “crypto winter” of 2022.
Data from LSEG showed that flows into the 10 largest spot bitcoin ETFs generated $420 million on Tuesday alone, the most in nearly two weeks. The three most popular, managed by Grayscale, Fidelity and BlackRock (NYSE 🙂), saw their volumes increase.
Traders have also invested in bitcoin ahead of the April halving event, a process that takes place every four years in which the rate at which tokens are released is halved, along with rewards given to investors. miners.
The supply of bitcoins is limited to 21 million, of which 19 million have already been mined.
Additionally, the prospect of the Federal Reserve making a series of rate cuts this year has fueled investor appetite for higher-yielding or more volatile assets. Exchange rate volatility has fallen to two-year lows and the US stock volatility index is returning to pre-pandemic levels.
