Bitcoin‘s rally reached a two-year peak on Monday, soaring above $65,000 and coming close to its record levels, driven by significant capital inflow.
Early in Europe, the price reached $65,537, marking a new two-year high after similarly breaking records in Asian markets.
The cryptocurrency was trading up by 4% at $65,045. Its peak was recorded in November 2021 at $68,999.99.
This surge is part of a broader uptrend that has seen Bitcoin’s value increase by 50% this year, with a notable acceleration in the past few weeks.
This has been partially attributed to a spike in investments into U.S.-listed Bitcoin funds.
The approval and launch of spot Bitcoin exchange-traded funds (ETFs) in the United States have significantly contributed to this trend, attracting large-scale investors and renewing the excitement that previously led to record highs in 2021.
Markus Thielen, the head of research at 10x Research in Singapore, highlighted the sustained interest from investors, noting, “The flows are not drying up as investors feel more confident the higher price appears to go.”
Investments have been particularly strong in U.S. spot Bitcoin funds, with net inflows reaching $2.17 billion in the week leading up to March 1.
Over half of this went into BlackRock’s iShares Bitcoin Trust, illustrating the robust appetite among investors for cryptocurrency investments.
Ether, another major cryptocurrency, has also benefited from the bullish sentiment, riding on expectations of potential ETF approvals.
It has seen a 50% increase in its value year-to-date and was trading at two-year highs, with a 2.6% increase on the day at $3,518.
This rally in cryptocurrencies coincides with a broader upswing in global stock markets, including record performances in Japan’s Nikkei, the S&P 500, and the Nasdaq, alongside lower volatility in equities and foreign exchange markets.
Brent Donnelly, a trader and president at Spectra Markets, remarked on the positive correlation between tech-heavy indexes like the Nasdaq and cryptocurrencies, suggesting that as long as the former performs well, the latter is likely to follow suit, benefitting from its status as a high-volatility tech proxy and liquidity indicator.