LONDON: Bitcoin hit $60,000 on Wednesday for the first time in more than two years, as a flurry of capital into new US spot bitcoin exchange traded products fuelled a 42 per cent price rally in February, which would mark its largest monthly gain since December 2020.

Bitcoin was last up 6 per cent at $60,131, its highest since November 2021, when it hit a record just below $70,000. Bitcoin was also heading for its largest week-on-week gain in a year, up 18.5pc since Feb 21.

Traders have poured into bitcoin ahead of April’s halving event — a process designed to slow the release of the cryptocurrency. In addition, the prospect of the Federal Reserve delivering a series of rate cuts this year has fed investor appetite for higher-yielding or more volatile assets.

The bigger bitcoin exchange-traded funds (ETFs) have seen a definite pickup in interest this week.

“Bitcoin is being driven by the support of consistent inflows into the new spot ETFs and outlook for April’s halving event and June’s Fed interest rate cuts,” Ben Laidler, global markets strategist at retail investment platform eToro, said.

The value of all the bitcoin in circulation has topped $2 trillion this month for the first time in two years, according to crypto platform CoinGecko, while the price of the token itself has doubled in just four months.

The three most popular, run by Grayscale, Fidelity and BlackRock, have seen trading volumes surge.

On Monday and Tuesday, around 110 million shares in the biggest three changed hands, about 51pc of the 215 million shares traded in the market’s most valuable companies — Apple, Microsoft and Nvidia, according to LSEG data.

Three weeks ago, this percentage was closer to 15pc.

Meanwhile, the world’s second biggest cryptocurrency Ether, which underpins the Ethereum blockchain network, rose 3.2pc to $3,353, having hit another two-year high earlier in the day. The price has risen 47pc in February, the biggest monthly gain since a 70pc rally in July 2022.

Published in Dawn, February 29th, 2024