Bitcoin on Monday rallied to its highest level since November 2021, as exchange-traded funds investing directly in the cryptocurrency attract more capital into the space, while investors await the upcoming “halving” event, which has historically been bullish for bitcoin prices.
Bitcoin BTCUSD, +2.66% rose 9.5% over the past 24 hours to nearly $ 57,000 at one point, according to CoinDesk data. It is roughly off 17% from its record high at $ 68,990, reached in November 2021.
Investors have seen significant inflows into bitcoin after the U.S. Securities and Exchange Commission approved 10 bitcoin ETFs for the first time in January.
They are also looking forward to the so-called “halving” event, which is expected to happen in April.
Halving is a mechanism written in the blockchain’s algorithm to control the supply of bitcoin, which has a cap of 21 million. At halvings, the reward for bitcoin mining is cut in half, meaning that miners will receive 50% fewer bitcoins for verifying transactions.
Halvings are scheduled to happen after every 210,000 blocks that are mined, or about every four years, until the maximum supply of 21 million bitcoins are all released. Historically, bitcoin has seen price appreciation months after halvings.
From the technical perspective, as bitcoin broke out its sideways trading range that has been intact since Feb. 10, “this price gain should likely reach targets near $ 58.4 initially with a possibility of $ 62k which should be the last real area of resistance ahead of a possible challenge of former all-time highs,” Mark Newton, head of technical strategy at Fundstrat Global Advisors, wrote in a Monday note.