It’s been a busy year so far for bitcoin, the largest cryptocurrency by market capitalization, and it’s only March. The digital currency hit a new all-time high for the first time since November 2021 when it topped $69,000 on Tuesday morning as demand picked up in recent weeks following spot bitcoin ETF approvals in the US and bitcoin pending against half at the end of April.
Bitcoin is up more than 60% on the month and about 205% on the year, according to CoinMarketCap data. The total cryptocurrency market cap across all tokens has increased by 18% to $2.55 trillion, with bitcoin making up 52% of that amount.
The new high occurred ahead of bitcoin’s halving event, which is expected to occur in mid-April and occurs roughly every four years.
Half of Bitcoin, which is commonly referred to as “the halving”, is a periodic reduction in bitcoin mining rates, meaning that the number of bitcoins miners can potentially receive for each block mined is halved. This process is intended to control the supply of bitcoins over time, and once the number of bitcoins in circulation reaches 21 million, its total supply, the process will terminate. However, the latter half is not expected to occur for more than 100 years.
In the past, bitcoin halvings have brought increased interest in the asset, as demand usually outstrips supply, with its price typically increasing in the months following the event.
The price increase is also due to the 11 spot bitcoin ETFs approved by the US Securities and Exchange Commission in January. These ETFs brought in new institutional investors and retail investors operating through financial advisors. As a result, massive amounts of institutional dry powder waiting on the sidelines sprung into action.
Recently, the number of bitcoins bought by ETFs has also offset the number of new bitcoins produced by miners, according to HODL 15 Capital data. shared with X by Bitwise Asset Management CIO Matt Hougan.
The issuers of these ETFs have seen demand grow beyond initial projections of a few billion. The total market capitalization for spot bitcoin ETF products is $53.74 billion, according to Blockworks data. Trading volume in 24 hours was $1.81 billion.
