Bitcoin (BTC) surpassed $50,000 on February 12, 2024, starting a bullish trend in the crypto market. Following this, Bitcoin price quickly approached its new high, demonstrating a significant upward movement. Both enthusiasts and investors have been carefully watching its price performance, anxiously awaiting the opportunity to exceed the $69,000, the all-time high it once reached in November 2021. Although facing fluctuations, BTC has shown resilience and maintained its upward course. On March 4, 2024, the king of cryptocurrency started at $63,137.00, peaked at $68,537.03, hit a low of $62,386.52, and ended at $68,330.42, with just a 0.98% difference from its former peak. What factors contribute to this positive Bitcoin outlook?
Bitcoin Price Market Performance
Bitcoin has experienced major price swings since its creation in 2009, starting low and reaching $30 in 2011, then dropping to $5. It surged to over $1,000 in 2013, but fell after the Mt. Gox hack in 2014. Growth continued in the following years, hitting $1,000 in 2016. 2017 was a significant year with Bitcoin surpassing several price records and reaching new peaks
However, 2018 saw a downturn, followed by a recovery to around $7,000 in 2019. The COVID-19 pandemic in 2020 initially caused a dip, but Bitcoin quickly rebounded, reaching new highs above $60,000 by early 2021. 2022 brought a “crypto winter,” with BTC struggling amidst market volatility. As of the end of 2023, the digital gold closed at $42,265.19, reflecting its ongoing journey of volatility and resilience. On March 4, 2024, bitcoin neared its all-time high at $68,537 before retracing slightly to $66,716 at the time of writing, according to CoinMarketCap.
Reasons Behind BTC Rallying
The current rally in Bitcoin’s price is primarily driven by several factors.
1. Authorization of Spot Bitcoin ETFs
The recent surge in Bitcoin is believed to be due to the rise in popularity of spot Bitcoin ETFs, which let investors access Bitcoin directly without owning the cryptocurrency. These ETFs, managed by companies that buy and store Bitcoin for investors, offer shares on stock exchanges – unlike traditional Bitcoin ETFs that use futures contracts.
The approval of spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) in January marked a significant milestone in the cryptocurrency market. Since then, investors have poured approximately $7.35 billion into the 11 different spot Bitcoin ETFs available. With institutional giants endorsing and participating in the spot Bitcoin ETF market, confidence in Bitcoin’s legitimacy and potential as a financial asset has surged, contributing to its ongoing rally
2. Safe-Haven Status
Bitcoin and Ethereum are increasingly being viewed as safe-haven assets, similar to gold, amid growing economic uncertainties and concerns about traditional financial markets. Large investors, including institutions and high-net-worth individuals, are turning to cryptocurrencies as a hedge against inflation, currency devaluation, and geopolitical risks. This perception of Bitcoin and Ethereum as digital gold has contributed to their demand and subsequent price appreciation.
3. Blackrock’s Bitcoin ETF Sparks Record Trading Volumes
The surge in Blackrock’s Bitcoin ETF trading volumes, consistently hitting $1 billion for six days, has coincided with Bitcoin’s price surpassing $65,000. Bitwise Asset Management CIO describes the demand for Bitcoin ETFs as unprecedented, attributing it to supply shortages and heightened investor interest. Additionally, digital asset investment products saw a significant $1.84 billion inflow, with Bitcoin dominating at 94%. This surge in ETF performance and inflows has contributed to the current bullish sentiment driving Bitcoin’s price higher.
3. Fear of Missing Out (FOMO)
Moreover, the rise in the value of the cryptocurrency in recent weeks has been attributed to the fear of missing out (FOMO), leading investors to join the upward trend. As Bitcoin reaches new all-time highs and receives widespread media coverage, investors are afraid of missing out and hurrying to purchase Bitcoin to benefit from its upward momentum. This buying pressure driven by FOMO has intensified the rally, causing a self-sustaining cycle of price hikes.
4. Anticipation of Bitcoin Halving
Additionally, given Bitcoin’s value has doubled in the past year, investors are expecting further price increases post the upcoming Bitcoin halving event in April. This event will halve the reward for mining Bitcoin, potentially reducing the supply of new coins. As demand continues and supply decreases, prices are expected to rise due to a supply-demand imbalance. Consequently, traders are preparing for potential price growth post the halving event, contributing to the current market rally..
5. Improving Regulatory Clarity
Unlike previous Bitcoin rallies, the current one is occurring in an environment of increasing regulatory clarity surrounding cryptocurrencies. Governments and regulatory bodies worldwide have been working to establish clear frameworks for the operation of digital assets, providing investors with greater confidence in the legitimacy and future prospects of Bitcoin and other cryptocurrencies. This regulatory clarity has helped alleviate concerns about potential crackdowns or bans, increasing investor participation and driving up prices.
Conclusion
Bitcoin’s journey to near its all-time high of $69,000 on March 4, 2024, highlights its resilience and growing prominence in the financial landscape. The factors discussed above collectively drive Bitcoin’s current rally, attracting institutional and retail investors alike. As Bitcoin continues to gain traction and approach its previous peak, its role as a transformative asset class in the global economy becomes increasingly evident.
The post Bitcoin Price is Only 2% to Its ATH of $69,000. Why is BTC Rallying? appeared first on CoinGape.
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