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© Reuters. FILE PHOTO: A Bitcoin is seen in an illustration image taken at La Maison du Bitcoin in Paris, France on June 23, 2017. REUTERS/Benoit Tessier/File photo
SINGAPORE (Reuters) – Frantic activity in Bitcoin put it on track for its biggest monthly gain in more than three years on Thursday and near a record high, as flows into Bitcoin exchange-traded funds fuel a broad rally.
The largest cryptocurrency by market capitalization was steady at $61,100 in Asia morning trade after changing hands as high as $63,933 overnight. Its monthly increase is more than 44%, the largest since December 2020.
It is dragging the smaller Ether along – it was last bought at $3,416, up 50% in February.
The momentum pointed to a “test and likely breakout” of $69,000, said Tony Sycamore, analyst at broker IG Markets, which would take Bitcoin above its record high set during the heady crypto peak days of November 2021 .
The head of Coinbase (NASDAQ:) Global said the exchange is struggling with a surge in traffic.
“If it were any other market, it would probably fall into the ‘blow-off top – don’t go near that bubble’ category,” said Matt Simpson, senior market analyst at City Index.
“But Bitcoin is back in its parabolic rally phase, with no immediate signs of a top.”
The approval and launch of spot Bitcoin exchange-traded funds in the US this year has opened the asset class to new investors and reignited excitement lost after the price collapse of the “crypto winter” of 2022.
LSEG data showed that inflows into the top 10 spot Bitcoin ETFs brought in $420 million on Tuesday alone, the highest in nearly two weeks. The three most popular, operated by Grayscale, Fidelity and BlackRock (NYSE:), saw an increase in volume.
Traders have also been investing in Bitcoin ahead of April’s halving – a process that occurs every four years in which the rate at which tokens are issued is halved, along with the rewards given to miners.
The supply of Bitcoin is limited to 21 million, of which 19 million have already been mined.
Additionally, the prospect of a series of interest rate cuts from the Federal Reserve this year has sparked investor interest in higher-yielding or more volatile assets. Exchange rate volatility has fallen to its lowest level in two years and the U.S. stock volatility index is returning to pre-pandemic levels.
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