In the current market, Bitcoin remains the leading digital asset, showing notable movements as it drifts lower by about 1.5 percent and sits around 62,000 dollars. It is roughly six percent away from its all time high of 66,000 dollars reached on October 20, 2021. Over the past five days, the crypto has surged by about 21.5 percent, and for the year its gain runs near 48 percent. Over the last twelve months, the increase tallies around 178 percent.
Bitcoin briefly touched 64,000 dollars per unit this Wednesday, a level not seen since November 2021, following a period of rapid gains. These gains come at a moment of strong capital inflows into new spot exchange-traded funds, a development approved earlier in the month by the U.S. Securities and Exchange Commission. The surge illustrates how institutional participation can amplify price moves in a market already leaning bullish.
According to Zach Pandl, head of macroeconomic analysis at Grayscale Investments, demand for bitcoin is meeting a tightening supply. He notes that new U.S. spot bitcoin ETFs have averaged about 195 million dollars a day in February, while the bitcoin network currently generates roughly 900 coins daily, equivalent to about 54 million dollars at a 60,000-dollar price. With the next halving event anticipated, the argument goes that there will be fewer new bitcoins entering circulation just as demand stays firm, elevating the price through the basic dynamics of supply and demand.
The recent decline in interest rates has also provided a helpful tailwind for the asset class. Over the last year, Bitcoin has posted a 178 percent gain, making it the standout performer in that period. This momentum is connected to expectations that the Federal Reserve will reduce interest rates at least three times in 2024. In 2023, Bitcoin finished the year with a 108 percent gain, underscoring how monetary policy expectations can influence risk-on assets.
In markets, a higher cost of money or expectations of central banks tightening policy typically benefits fixed income while weighing on risk assets. Conversely, when policy becomes less restrictive, riskier and more volatile assets like technology stocks, biotech equities, and cryptocurrencies often attract investors seeking higher potential returns.
The year 2022 marked a challenging period for Bitcoin, posting an 18.4 percent decline amid the collapse of the stablecoin TerraUSD and the broader push toward higher interest rates to combat inflation. Yet volatility remains a defining characteristic of Bitcoin and the wider crypto space, with ongoing debates about its long-term role and resilience in varied monetary regimes. At present, Bitcoin’s market capitalization sits around 1.21 trillion dollars, and daily trading volume has hovered around 50.2 million dollars over the last 24 hours, above the year-to-date average of about 20 million.
Fresh opinions from industry observers point to a reduced supply dynamic as a critical driver of recent gains. The forthcoming fourth halving, expected between March and June 2024, would further shrink miners’ rewards. Historically, every halving has coincided with new all-time highs within roughly a year, fueling investor belief that the supply curve could help push prices higher in the months ahead. Circulation stands near 19.5 million coins, with a final supply capped at 21 million tokens in the long run.
However, central banks remain doubtful about the role of cryptocurrencies. A policy paper from the European Central Bank criticized Bitcoin, arguing that it has not fulfilled its promise as a decentralized digital currency suitable for legitimate transfers and maintaining a value close to zero. These regulatory perspectives matter because they shape how institutions and retail traders view risk, liquidity, and acceptance in mainstream markets.