Bitcoin Soars Beyond $64K, Hits Highest Mark Since November 2021

On Wednesday, Bitcoin surged to the highest it has been to since November 2021. It rose to just above $64000, before the prices started falling again.

The bulls as well as the bears of the market were stunned by the sudden and steep movement in the prices. Bitcoin has risen by more than 20% in the last week alone. As for 2024, the prices are up by more than 40% since the start of the year.

A lot of the contribution to this increase in Bitcoin prices also goes to the launch of ETFs this year. For the people unaware about ETFs, An exchange-traded fund (ETF) represents a collective investment security that can be traded similarly to an individual stock, allowing for buying and selling.

Investors are expecting the prices of Bitcoin to reach an all-time high this year because of the launching of ETFs making the asset class more accessible to institutional investors, paired with the upcoming halving event of Bitcoin.

To those unaware, Bitcoin halving refers to the rate at which new Bitcoins are released into circulation. The halving is mandatory in the Bitcoin code. The next Bitcoin halving events are expected in April 2024. The supply of Bitcoin is lowering, and the demand of Bitcoin is increasing. There will simply not be enough Bitcoin that can accommodate the increasing demand in the market. This will lead to prices that have never been reached before.

The purchase of Bitcoin ETFs does not affect the price of the cryptocurrency; However, the new Bitcoin issuers will ultimately have to acquire physical Bitcoin to secure sufficient tokens to support the shares they issue.

Speaking about Bitcoin ETFs, the Bitcoin ETF record was broken recently again with an inflow of approximately $612 million in one single session. This is mainly being done by people’s fear of missing out on the latest crypto rally. The digital asset is on a remarkable run this year.

Various investment banks in the US like Blackrock, Grayscale and Fidelity are investing billions of dollars into Bitcoin. These investment banks are also being called “Bitcoin whales” because of this same reason. There will only be about 21 million Bitcoins in existence ever. And about 19 million Bitcoins have already been presented and accounted for and most of them are probably not even on the market anymore.

As per Glassnode data, half of the Bitcoins in circulation have not moved in the last two years. This is causing major concerns in the industry about there being not enough Bitcoin.

Basically, the halving, coupled with the increased demand for bitcoin due to newly launched ETFs has caused a major ruckus in the market. This big demand for crypto has caused the prices to reach the pandemic era highs. The prices had reached $69,000 during the pandemic and they have come into view again.

As Bitcoin prices ascend, it’s evident that the digital currency’s journey remains a captivating narrative in the ever-changing dynamics of the financial world.

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