With its quick recovery continuing, with it almost reaching its all-time high, Bitcoin is surging ahead.

Monday saw an 8% increase in the value of the digital token to $67,310, which is much higher than its $44,000 starting point for the year and just under $2,000 short of its record high of over $69,000 set in November 2021.

What’s driving the protest? Analysts following the cryptocurrency space claim that one reason why Bcoin is surging is the increased demand for so-called spot exchange-traded funds. Experts said that this year has seen a massive inflow of capital into exchange-traded funds (ETFs), which enable investors to experiment with cryptocurrencies in a less hazardous way than in the past.

According to Joel Kruger, a market strategist at digital currency exchange LMAX Group, “investors are getting turned on to the fact that bit it can be treated as an uncorrelated asset, which makes it extremely attractive for portfolio diversification,” as reported by CBS MoneyWatch.

Investors can have direct exposure to bitcoin without retaining any of it by purchasing a spot bitcoin ETF. Spot bitcoin ETFs have bitcoins as their underlying asset, as opposed to normal bitcoin ETFs, which have bitcoin futures contracts as their underlying asset. Every spot bitcoin exchange-traded fund (ETF) is overseen by a company that issues share of its bcoin holdings that are acquired either directly from other holders or via a licensed cryptocurrency exchange. A conventional stock exchange lists the shares.

The sale of spot bitcoin exchange-traded funds (ETFs) was authorized by the U.S. Securities and Exchange Commission in January. According to a Monday Bloomberg story, since then, investors have put around $7.35 billion into the 11 different available funds. Spot bcoin ETFs are currently available from some of the biggest institutional investors in the world, including Fidelity Investments and BlackRock.

The price of Bitcoin started to rise months earlier in 2023 when it reached a 19-month high of over $41,000 in December.

Back then, analysts attributed the spike to three primary things: the expectation that the SEC would approve the spot ETFs, the expectation that the Fed would drop rates, and the expectation of the impending halving event, which would cut the reward for mining bcoin in half.

To be sure, the continuous rise in the price of bcoin does not lessen its volatility, as Laila Maidan, an Insider investing journalist, noted to CBS News in December when the price of the cryptocurrency broke $41,000, then its highest level in 19 months.

“It doesn’t mean crypto is going to skyrocket and stay high,” Maidan added. “It’s still volatile and there’s a lot of people who will always trade it.”
Nevertheless, the return of bcoin is good news for cryptocurrency investors, many of whom lost a lot of money on their holdings in 2022 due to the failure of FTX and other exchanges. Financial analysts frequently use Bcoin, the largest cryptocurrency in the world in terms of both trading volume and mining volume, as a barometer for the state of the cryptocurrency market as a whole.

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