Bitcoin, the most famous of cryptocurrencies, passed the $60,000 mark (55,360 euros) on Wednesday, February 28, and is approaching its historic price of $68,991, reached in November 2021. Its very strong rise, more of 40% increase in 2024, is partly explained by the approval, on January 10, by the American market watchdog, the SEC, of an index fund (ETF) indexed on bitcoin which theoretically allows a more wide public to invest in these cryptocurrencies without having to hold them directly.
The anticipation of the authorization of a new investment product following the price of bitcoin had contributed in recent months to the rise in prices, which had largely fallen at the end of 2022, after the bankruptcy of several giants in the sector.
This has “generated a new wave of optimism, causing transaction volumes to soar”, notes Mikkel Morch, from the specialized fund ARK36, to Agence France-Presse (AFP). The inflows to these new funds were massive, and supported the price of bitcoin, responded Charlie Morris, of ByteTree, also to AFP.
An increase in prices favored by the next “halving”
The analyst also cites the halving (or “halving”) as the cause of the price increase. Bitcoin is created − or ” extract “ − as a reward when powerful computers solve complex problems. The quantity of bitcoins is limited and approximately every four years, the reward given to “minors” who extract it is divided by two. The next halving is scheduled for April.
Some investors wanting to recoup their stake had initially generated a wave of massive withdrawals from the GBTC fund (Grayscale Bitcoin Trust), after having converted it into an ETF. Once the selling fever subsided, flows into US bitcoin ETFs, such as that of asset management giant BlackRock, increased.
Investment products linked to cryptoassets listed on stock exchanges have attracted around 5.7 billion dollars (around 5.15 billion euros) since the start of the year, according to calculations by asset manager CoinShares published on Monday.
Other evidence “the growing institutional support which fuels the rise in prices”, according to Mr. Morch, software company MicroStrategy announced Monday that it had purchased an additional 3,000 bitcoins (the equivalent of $155 million at then prices, according to MicroStrategy founder Michael Saylor), bringing the total to its bitcoin holdings at 193,000 bitcoins acquired for $6 billion. As of Thursday, these assets were worth some $12 billion.
The price of bitcoin has also been boosted by forecasts of interest rate cuts from the US Federal Reserve and other major central banks, reducing the attractiveness of the dollar and US Treasuries to investors.
Since the last halving in May 2020, “the price of bitcoin increased by more than 600%”notes Simon Peters, eToro analyst, and although the percentage increase decreases between each cycle, “it is very possible that the price peak will be somewhere in the six figures”.