Bitcoin surges past $60,000: What’s driving the cryptocurrency boom

Photo: AFP

Published: Thursday February 29, 2024, 12:45

Last update: Thursday, February 29, 2024, 2:25 p.m.

Bitcoin (BTC) soared on Wednesday, surpassing the $60,000 mark for the first time since November 2021, marking a significant rally in the cryptocurrency world. Bitcoin's upward journey has been steady since September last year. The recent surge adds to Bitcoin's impressive performance in 2024, with a year-to-date return of more than 42 percent, with a gain of almost 6 percent in the last 24 hours alone.

What is Bitcoin?

Often referred to as the online equivalent of cash, Bitcoin stands as the world's largest decentralized digital currency, employing peer-to-peer technology to function independently of intermediaries. With over 18 million Bitcoins currently in circulation, its popularity continues to rise.

Why is it rising and what's next for the world's largest cryptocurrency?

The recent rise in Bitcoin value is driven by optimism among crypto investors after the US Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in mid-January. Just yesterday, over $577 million was invested in spot Bitcoin ETFs. These ETFs allow institutional trading of Bitcoin at its current price, unlike previous ones that only dealt with Bitcoin futures, a more complex investment suitable for experienced traders. According to Arshad Khan, a Dubai-based digital asset expert, Bitcoin and many leading Altcoins are experiencing a bullish rally. "There are several reasons for this," he explained. “The upcoming Bitcoin mining reward halving is one of the factors.” Khan also highlighted investor demand for Bitcoin ETFs launched by major financial institutions, stating: “This is attracting significant interest from institutions that previously showed little interest in cryptocurrencies.” He continued: "Investors are starting to recognize the use cases of certain cryptocurrencies with well-defined use cases and governance methods. Increasing regulatory approvals and recognition from various government authorities are also driving the adoption of cryptocurrencies towards the mainstream." mainstream".

What is a Bitcoin ETF and what is it for?

A Bitcoin exchange-traded fund (ETF) is a financial product that allows investors to track Bitcoin price movements without directly owning the asset. These ETF shares are traded on traditional stock exchanges, making it simpler for investors to access the cryptocurrency market.

Will there be a price correction?

Daniel Yan, co-founder of Singapore crypto services company Matrixport, anticipates an imminent market correction. However, Khan believes the rally will persist before another possible price correction. Significantly, historical data shows that there have only been very few cases where Bitcoin has surpassed the value of $61,000.

What about other cryptocurrencies?

Other major cryptocurrencies have witnessed substantial gains, notably Ethereum (ETH), which surpassed $3,300 as bullish momentum continued to push the world's second-largest cryptocurrency upward. Currently, ETH is up 2.61 percent in the last 24 hours and more than 12 percent over the week, according to CoinMarketCap.

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