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Bitcoin jumped above $54,000 on Monday, hitting its highest level in over two years – sparking speculation about a possible return to its lifetime highs.
Ether (ETH), the second-largest digital coin in the market, also gained around 3.2% to hit $3,177 amid a crypto-wide market rally.
Bitcoin's uptrend
In 2021, the world's largest cryptocurrency Bitcoin (BTC) surpassed $53,000 per coin for the first time in history. After falling around 74% from its all-time high in the Terra-triggered crisis in 2022, the cryptocurrency had a lot of ground to make up. But today BTC finally broke through the $53,000 mark again.
According to data from CoinGecko, the flagship cryptocurrency was priced at $54,452 at press time. That's a 5.0% increase from yesterday and a 2.8% increase from last week.
Bitcoin started the month just above $42,000 and posted steady gains until it surpassed $50,000 on February 12. This was the first time BTC rose above $50,000 since December 2021.
However, the leading cryptocurrency has not made any significant price movements since then. It has been holding steady above the $50,000 zone for about 14 days, but has mostly traded between $51,000 and $52,000 recently before Monday's rally.
This increase is mainly due to increasing investor interest, particularly through spot exchange-traded funds (ETFs), which have seen significant inflows. Spot BTC investment vehicles have seen net inflows of nearly $5 billion since their debut on January 11, highlighting investors' changing preference toward regulated and easily accessible products for crypto exposure.
Can Bitcoin Reach $100,000 This Year?
Despite the ongoing rise, Bitcoin's price is still 22.7% below its November 2021 all-time high of $69,044. However, the longer the ETF inflow continues, the higher the likelihood that a supply shock will hit Bitcoin in the near future will drive over $60,000 term.
Additionally, Bitcoin is expected to undergo a halving around April 20th. The halving occurs programmatically every four years and cuts the BTC rewards given to miners for securing the network by 50% to stave off inflation. This means that fewer new BTC will be minted after the halving, which in turn slows supply expansion. Market experts believe that the exploding demand for BTC following the launch of the Bitcoin ETF, coupled with the impending supply shortage resulting from the halving, could push BTC into the six-figure range in no time.
Analysts at Standard Chartered Bank expect BTC to reach $100,000 before the end of 2024. The upcoming Bitcoin halving will be one of the catalysts for the price increase.
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