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In February, Bitcoin soars by 45%, aiming for all-time highs

Bitcoin's Meteoric Rise: A Memorable February

This month has witnessed enormous gains for the largest cryptocurrency in the world by market value, thanks to factors like increasing institutional usage, impending halving’s, and a resurgent crypto bull market.

Monthly Volatility Drives Bitcoin Above $63K

The largest monthly gain for the digital asset since December 2020 was achieved by bitcoin prices, which increased by almost 45% in February to levels last seen in November 2021.

In the morning session in Asia on February 28, the cryptocurrency was trading steadily around $62,000, having surged as high as $63,933 the previous night. In the midst of a larger rebound in cryptocurrency assets like Ether, the rise puts Bitcoin on course for one of its strongest months in years.

Opportunities for $69K and Up

As interest in cryptocurrencies rekindles, Brian Armstrong, CEO of prominent US exchange Coin base Global, reports a notable increase in traffic and new sign-ups on the platform.

Some observers believe Bitcoin will soon surpass its previous all-time highs because of its unstoppable momentum.

We anticipate an additional examination and probably a breach of the psychological $69,000,” stated Tony Sycamore, an Australian market analyst at IG Markets.

In November 2021, Bitcoin reached a record high of $69,044. Should Bitcoin significantly break over this barrier, the long-term rally may be accelerated.

Institutional Demand is Driven by Spot Bitcoin ETFs

The introduction of the first spot crypto ETFs in the US earlier this year served as a significant impetus for the most recent Bitcoin bull run. The prices of Bitcoin are easily accessible to common investors thanks to these exchange-traded funds.

The ten biggest spot Bitcoin ETFs saw an incredible $420 million in inflows on February 27 alone, according to data from the London Stock Exchange Group (LSEG). This was the largest daily amount in the previous two weeks.

Large cash inflows were seen in offerings from asset managers such as Grayscale, Fidelity, and BlackRock, indicating a soaring institutional interest.

Reducing increases FOMO and scarcity.

In the background, expectation generated by scarcity is growing for Bitcoin’s April 2024 “halving” event. The quadrennial milestone reduces the rate at which newly mined Bitcoin is released into circulation by half.

Halving’s decrease the amount of Bitcoin rewards that miners may claim, making the commodity provably more rare over time. There are just about 3 million coins left to mine out of a specified maximum of 21 million.

As the next halving draws near, a lot of traders are seeking to get in ahead of the cycle of value appreciation following halving’s while minting rewards are still greater.

Macro Tailwinds Encourage Taking on Risks

Macro Tailwinds Encourage Taking on Risks

Beyond stories about various cryptocurrencies, Bitcoin’s growth appears to be aided by an improving economic environment. The possibility that the US Federal Reserve could lower interest rates several times later this year has increased investor interest in riskier, growth-oriented assets.

Simultaneously, declining volatility in US shares and currency points to increased market stability and risk tolerance. While a JPMorgan measure of FX volatility fell to two-year lows, the CBOE Volatility Index has recovered to pre-pandemic levels, promoting a shift toward alternative value storage like Bitcoin.

Developments in Regulation: Mixed but Generally Positive

Even while there is still uncertainty around global cryptocurrency regulations, recent events seem to be slightly positive for Bitcoin.

A 30% tax on profits from digital asset transfers was disclosed in India’s 2023 budget, which represents a change from the previous supposed ban. A tentative agreement for a comprehensive Markets in Crypto assets (MiCA) framework was recently reached by the European Union. Legislators in Japan are purportedly developing stable coin rules to supplement current licensing programs.

Negatively, Grayscale, the biggest digital asset management, had intentions to launch a spot Bitcoin exchange-traded fund (ETF), but the US Securities and Exchange Commission (SEC) vetoed such plans. Grayscale has promised to keep going after a listed fund, though.

For the bull run to continue, institutional demand must be stable.

If Bitcoin can maintain momentum above the key $60K mark, it appears ready to challenge previous highs in 2023, with conditions appearing generally favorable. However, like in previous market cycles, there will probably be dips and volatility en route to an increase.

It is imperative that institutional flows stay directed into regulated exposure points like futures and ETFs in order to prevent the kind of severe downsides that previous bear trends have shown, such as unbacked Tether risk.

On-chain activity is still strong in the interim; active Bitcoin addresses recently reached 19-month highs. As investors remove coins to keep in private storage—usually optimistic indications of confidence in additional upside—exchange balances have also decreased.

With rising rates, inflation, and geopolitical crises causing havoc in legacy finance, investors continue to benefit from Bitcoin’s dependable programmed monetary policy as a hedge against global unpredictability. If a wider risk appetite persists, $100K in Bitcoin might not be out of reach in the upcoming year with the tailwinds still blowing.

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