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The price has continued to rise in March, which is in line with historical trends ahead of the long-awaited halving event.
BTC price recently rose above $73,000 and corrected below $65,000 due to profit taking. At the time of writing, the price of Bitcoin was trading at around $67,500.
The increase so far this year exceeds 60%, while the jump in 12 months has exceeded 150%.
“Bitcoin price recovery to the previous ATH appears to be faster than previous cycles. Bitcoin price is already above the previous ATH, suggesting that this cycle may be different and making a significant correction likely,” Menno Martens, crypto specialist and product manager at VanEck, told Investing.com.
Why is the price of Bitcoin rising?
The recent rise in the price of Bitcoin is due in part to the growing demand for spot Bitcoin exchange-traded funds (ETFs), which offer investors a less risky way to interact with cryptocurrencies.
These ETFs have experienced a significant influx of investment, drawing attention for their potential in portfolio diversification. Bitcoin spot ETFs differ from regular Bitcoin ETFs by allowing direct exposure to Bitcoin itself, rather than futures contracts.
Managed by companies that issue shares of their Bitcoin holdings, these ETFs provide a bridge for traditional investors to enter the cryptocurrency space by purchasing shares on conventional stock exchanges, avoiding the need to directly own or manage the cryptocurrency.
Another reason why Bitcoin prices are rising is related to the upcoming halving event. A Bitcoin halving is an event where the reward for mining Bitcoin transactions is reduced by 50%, and occurs approximately every four years.
This mechanism progressively decreases the speed at which new bitcoins are created and introduced to the market, with the goal of stopping the production of new bitcoins around the year 2140.
“Historically, Bitcoin halving events, which occur approximately every four years, have caused an increase in price,” Yuya Takemura, founder of Axys Holding, told Investing.com.
“The next halving in 2024 may continue this trend, possibly causing a significant price increase in 2025.”
Speaking of other factors that are helping the price of Bitcoin rise, Takemura also highlighted “the increased participation of Generation Z and the adoption of blockchain technology by governments and major financial institutions.”
While Takemura acknowledges recent analyst projections that Bitcoin's price could rise, he also warned of “market volatility and susceptibility to global economic conditions.”
Bitcoin Price Outlook
Investing.com recently wrote about JMP Securities saying that the price of Bitcoin could decline over the next three years as ETF inflows accelerate.
“We estimate that after ~$10 billion in flows to date, two months after launch, flows will actually continue to grow materially from now on for years to come, as the approval of the ETF is just the beginning of a longer capital allocation process,” JMP said.
Today, British brokerage Standard Chartered (OTC:) presented its own forecast. According to its analysts, the $150,000 level “now looks likely.” Therefore, the bank raised its price target for Bitcoin to $150,000 from $100,000 to reflect “the fastest transfer of ETF inflows to the BTC price to date.”
Furthermore, analysts at Standard Chartered see the current Bitcoin price rally continuing.
“$200,000 is the 'correct' price level for BTC at the end of 2025, in line with our previous price estimate, and is likely the new midpoint for a sideways trading range at that time.”
“It also suggests that a break above $250,000 is likely at some point in 2025 if ETF inflows continue apace and/or reserve managers buy BTC.”
