Bitcoin rose to US$60,000 for the first time in more than two years, amid surging optimism that demand for the token is widening beyond committed digital-asset enthusiasts.
The largest cryptocurrency has jumped more than 40% already this year, fueled in part by the successful launch of US exchange-traded funds holding the coins that have attracted more than US$6 billion since they began trading Jan 11. Bitcoin last traded at US$60,000 in November 2021, after reaching an all-time high of almost US$69,000 earlier that same month.
“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.
An upcoming reduction in Bitcoin’s supply growth, known as the halving, is adding to the optimistic sentiment. That has helped to extend a prolonged rally that has also stoked speculative appetite for smaller tokens like Ether and Dogecoin.
Bitcoin has more than tripled in value since the start of last year, climbing back from a 64% plunge in 2022, in a remarkable comeback from a series of crypto-industry scandals and bankruptcies that had raised questions about the viability of digital assets.
Digital tokens are jumping even though investors have pared back expectations for looser monetary policy this year, evidenced by a rise in US Treasury yields. Bitcoin has outperformed traditional assets like stocks and gold in 2024.
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“This reversal is all the more impressive in the light of central banks signaling they intend to keep rates high a while longer, eroding the theory that the next crypto bull would be driven by dropping interest rates,” said Michael Safai, co-founder at quantitative trading firm Dexterity Capital.
The massive inflows into Bitcoin ETFs have prompted some industry watchers to warn of a looming supply squeeze as new coins from miners can’t keep up with demand. Some 80% of Bitcoin’s supply hasn’t changed hands in the past six months, potentially exacerbating the squeeze and adding to the upward price pressure, analysts have said.
