Bitcoin above US$60,000: what has driven cryptocurrency?

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The asset’s prices rose more than 43% in February, the biggest monthly increase since 2020. Cryptocurrencies / Bitcoin / Ethereum Reuters Bitcoin ended the month of February with the biggest monthly gain in three years. The cryptocurrency went from around US$42.6 thousand (R$212.3 thousand) at the end of January to around US$61.2 thousand (around R$305 thousand) on the last day of last month, according to CoinDesk quotes. The number represents an increase of 43.7% in the period. This March 1st, the asset already exceeded US$ 62 thousand (approximately R$ 309 thousand). The movement has been driven by the flow of money into exchange-traded funds. That’s because the launch this year of exchange-traded spot bitcoin funds in the United States opened up the asset class to new investors and reignited market enthusiasm that had evaporated when prices plummeted following a series of industry collapses. in 2022. The asset’s rise also boosted other cryptocurrencies. Ethereum, for example, went from approximately US$2,281 (R$11,367) at the end of January to around US$3,340 (R$16,644) — an increase of 46.4%. According to broker IG Markets analyst Tony Sycamore told Reuters, the momentum in bitcoin suggested “a test and likely break” of US$69,000 (R$343,800). “If this were any other market, it would probably be in the ‘boom top – don’t go near this bubble’ category,” Matt Simpson, senior market analyst at City Index, told the news outlet. “But bitcoin is back in its parabolic rally phase, with no immediate signs of a top,” he added. The president of Coinbase Global said the exchange is dealing with an increase in traffic and LSEG data shows that around US$612 million (R$3.1 billion) flowed into the 10 largest spot bitcoin ETFs last Wednesday on Friday (28), the highest flow since February 14th. BlackRock’s iShares bitcoin trust was the biggest beneficiary of the movement, with US$550 million (R$2.7 billion) in inflows — the largest amount in a single day for the fund since its creation in January. Attention for ‘halving’ Operators are also investing in bitcoin ahead of the “halving” event scheduled for April, a process that occurs every four years in which the rate of bitcoin release to miners is cut in half. Bitcoin’s supply is limited to 21 million coins, of which 19 million have already been mined. Furthermore, the prospect that the Federal Reserve will make a series of interest rate cuts this year has reduced available bond yields and increased investor appetite for riskier assets, including fast-growing technology stocks.

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