This year has been quite eventful for bitcoin, the leading cryptocurrency in terms of market value, and we’re only in March. The cryptocurrency reached a new record high, surpassing $69,000 on Tuesday morning after increased demand due to recent spot bitcoin ETF approvals in the U.S. and the upcoming bitcoin halving in late April.
Bitcoin has surged by over 60% in the past month and approximately 205% in the last year, based on CoinMarketCap data. The overall value of the cryptocurrency market has risen by 18% to $2.55 trillion, with bitcoin accounting for 52% of the total.
The recent peak occurred before bitcoin’s halving event, projected to take place in mid-April and repeating approximately every four years.
Bitcoin halving, also known as “the halvening,” is a regular reduction in bitcoin mining rates. This results in a decrease in the number of bitcoins miners receive for each block mined. This process is designed to regulate the supply of bitcoin over time. Once the total number of bitcoin in circulation reaches 21 million, the process will come to a halt. The next halving is not anticipated to happen for over 100 years.
Historically, bitcoin halvings have generated heightened attention for the asset as demand usually surpasses supply, leading to price increases in the months that follow.
The surge in price is also fueled by the 11 bitcoin ETFs approved by the U.S. Securities and Exchange Commission in January. These ETFs have attracted both institutional investors and retail investors who work with professionals. Therefore, significant institutional funds that were on standby decided to make a move.
According to data from HODL 15 Capital, the amount of bitcoins bought by ETFs now surpasses the number of new bitcoins mined, as reported by Bitwise Asset Management CIO Matt Hougan.
The providers of those ETFs have experienced a surge in demand that exceeded the initial expectations of a few billion. According to data from Blockworks, the total market cap of spot bitcoin ETF products stands at $53.74 billion. The trading volume over a 24-hour period amounted to $1.81 billion.
