Bitcoin Frenzy Returns as Digital Asset Passes $60,000
Get caught up.
Bitcoin pushed past $60,000 for the first time in more than two years on Wednesday and has jumped about 40% already in 2024. The feeling has been that maybe things are different this time around. The current rally was triggered mostly by the successful launch of US exchange-traded funds that hold the coins—vehicles that have attracted more than $6 billion since they began trading Jan. 11. But at the heart of this particular rally is a simple tenet of economics: Supply and demand. The surge in demand for the cryptocurrency resulting from new ETFs is vastly outstripping the supply of new tokens being created in the mining process, as well as the Bitcoin long-time holders are willing to sell. That is what’s set the crypto market on fire of late, with fuel being added from traders chasing the upward momentum and loading up on leveraged bets that the surge will continue.
How frenzied is it out there? Some $520 million flooded into BlackRock’s Bitcoin ETF in just one day. The iShares Bitcoin Trust saw its biggest one-session haul Tuesday, marking the largest daily inflow so far among the batch of new ETFs tied to the digital asset. It was also the second-largest daily intake for any US ETF across all asset classes, data compiled by Bloomberg show.