Bitcoin soars close to an all-time high price

The most popular cryptocurrency, bitcoin, experienced a rally in price during the last two weeks. Contrary to some predictions, approval of the Exchange Traded Funds (ETF) in the United States pushed the request for the cryptocurrency, creating the cycle in which the bitcoin price went up in a short time. The previous all-time high price traded for one bitcoin was $69.000 back in November 2021. The bitcoin is now traded above the $67.000 

Back in January, the US Securities and Exchange Commission (SEC) approved the first bitcoin ETF after seven years since the first request. The SEC granted 11 ETFs and some of the biggest financial firms and institutional investors announced that their ETF was a success. The SEC’s decision made a clear path for institutional investors to offer bitcoin as an investment to its customers. 

According to available data, in the 37 days that the record is kept, more than 144 thousand bitcoins ended up locked in the ETFs. This makes an average of 3900 bitcoins of daily inflow. Calculated in the US currency, more than $7.3 billion is now located in the bitcoin ETFs. The biggest impact is seen by the World’s leading investment company, BlackRock. As per recent reports, nearly half of all Bitcoin ETF inflows have gone to BlackRock 

Having in mind the number of bitcoins consumed by the ETFs daily, and considering that the bitcoin mining industry can produce around 900 bitcoins per day, the demand for bitcoins continues (and will continue) to grow. It is important to mention that, regardless of the large demand, the bitcoin creation can not be hurried up or anyhow ramped up. Bitcoin has a set emission (fixed supply) which is planned and embedded into the consensus mechanism that underlays cryptocurrency. 

Another event, also embedded into the bitcoin protocol, played a significant role and will continue to do so in forthcoming days. In approximately 48 days (mid-April 2024) bitcoin will have another ‘halving’ event. That is a planned reduction of the reward for miners in the form of newly minted coins. At this moment, the reward for miners who find a valid bitcoin block is 6.25 bitcoins. After the next halving, the reward will drop to 3.125 newly created bitcoins per block. This will reduce the number of daily minted bitcoins to around 450, creating even more pressure on the demand side, hence a possible new time-high valuation for the bitcoin. The halving occurs once in four years and it has influenced the price of bitcoin throughout its history. No reason to believe it will be different this time.