Bitcoin set for biggest monthly jump since 2020 amid ETF boost

BITCOIN was on monitor for its largest month-to-month acquire in additional than three years on Thursday (Feb 29) and within reach of a report excessive, propelled by money dashing into exchange-traded funds.

The approval and launch of spot bitcoin exchange-traded funds within the US this 12 months has opened the asset class to new traders and reignited the joy that evaporated when costs collapsed within the “crypto winter” of 2022.

The largest cryptocurrency by market capitalisation was final up 3.4 per cent at US$62,205, having modified palms at US$63,933 in a single day, the very best since late 2021.

Bitcoin’s month-to-month acquire is greater than 47 per cent, its largest since December 2020, and its rally has pulled ether alongside in its wake. The smaller cryptocurrency topped US$3,500 for the primary time since April 2022 on Wednesday and was final up 4.3 per cent at US$3,466, taking its February enhance to 52 per cent.

The momentum in bitcoin instructed “a test and likely break” of US$69,000, mentioned Tony Sycamore, an analyst at brokerage IG Markets. That would put bitcoin past its report excessive set within the heady days of crypto peaks in November 2021.

“If this were any other market, it would likely be in the ‘blow-off top – don’t go near that bubble’ category,” mentioned Matt Simpson, senior market analyst at City Index.

“But bitcoin is back in its parabolic-rally phase, with no immediate signs of a top.”

The head of Coinbase Global mentioned the change was coping with a surge in site visitors and LSEG information reveals round US$612 million flowed into the ten largest spot bitcoin ETFs on Wednesday, probably the most since Feb 14.

BlackRock’s iShares bitcoin belief was the foremost beneficiary, with US$550 million in flows – probably the most in a single day to the fund since its inception in January.

Traders have additionally poured into bitcoin forward of April’s halving occasion, a course of that takes place each 4 years through which the speed at which tokens are launched is minimize in half, together with the rewards given to miners.

Supply of bitcoin is proscribed to 21 million, of which 19 million have already been mined.

In addition, the prospect of the US Federal Reserve delivering a collection of rate of interest cuts this 12 months has lowered the yields obtainable on bonds and boosted investor urge for food for riskier property, together with fast-growing tech shares.

“Rate cuts matter,” mentioned Geoff Kendrick, head of crypto analysis at Standard Chartered, “If you can get higher returns elsewhere, Treasury yields are higher, then you’re comparing that against what you can earn from bitcoin”.

Kendrick mentioned the well being of the US economic system and the inflows into bitcoin funds have been extra vital elements.

“The ETF inflows have been huge,” he added. REUTERS