Investor Interest drives Bitcoin Price Past $60K

Bitcoin (BTC) continues its bullish momentum this week, having reclaimed the $60,000 mark for the first time since late 2021. The surge in value for the world's first cryptocurrency has been bolstered by investor interest in exchange-traded funds (ETFs) and additional purchases by tech titan MicroStrategy Inc. At the time of writing on 27 February, BTC prices continue to dance around $62K, lifting the rest of the cryptocurrency market as many altcoins also make moderate gains. Since the beginning of 2024, Bitcoin's price has surged by about 40%, fueling speculation not only in larger altcoins like Ethereum (ETH) and Dogecoin (DOGE), but also in smaller contenders.

Demand for Bitcoin rises before scheduled supply reduction

Significant capital inflows, totaling $6.1 billion, have flooded into a series of groundbreaking Bitcoin ETFs that began trading in the US on 11 January, indicating a broadening interest in the token beyond the usual community of dedicated digital asset enthusiasts. MicroStrategy, a software firm with a corporate strategy of acquiring Bitcoin, announced on Monday that it had acquired approximately 3,000 more tokens this month, bringing its total Bitcoin holdings to around $10 billion.

The flow of capital into spot crypto ETFs has kept up its momentum in February. Last week (the 19th–23rd), institutional investors deposited nearly $598 million into various crypto products offered by prominent firms such as BlackRock, ARK Invest, Grayscale and others. Bitcoin funds received the lion's share of inflows, totaling approximately $570 million, while Ether came in second with $16.8 million. 

The influx of funds into Bitcoin ETFs has prompted some analysts to warn of a potential supply shortage as miners struggle to meet demand. At present, miners are adding a cumulative 900 fresh BTC to the daily supply. However, spot Bitcoin ETFs are witnessing net inflows of approximately 8,000–9,000 BTC per trading day. This further depletes the supply as demand continues to rise, creating a bullish scenario for BTC's price.

Additionally, the anticipation surrounding the scheduled reduction in Bitcoin's supply growth, known as the halving, or 'halvening' in crypto community slang, is contributing to the upward price trend. For Bitcoin holders looking forward to the halving in April, it appears that a perfect storm of decreased supply from halved block rewards and increased demand from investors could come together to drive up prices even higher.

Does Bitcoin beat the stock market?

Despite a rise in US Treasury yields, Bitcoin and other digital assets are experiencing upward momentum. Bitcoin has outpaced traditional assets such as stocks and gold this year, with its price relative to the precious metal reaching its highest level in over two years. As a result, shares of crypto-related companies surged in the US on Monday, reflecting the positive sentiment. 

This pattern shows that spot ETFs could be a real game-changer for the top cryptocurrency, pushing the price up even through macroeconomic trends that usually correlate with a depressive effect on BTC prices.

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With analysts predicting continued bullish momentum in the cryptocurrency market thanks to growing institutional support, heightened interest in spot ETFs, and excitement surrounding the upcoming halving event, traders have an unmissable opportunity to profit from this exciting moment in crypto history.

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