Bitcoin is within striking distance of its highest price ever, after the world’s largest cryptocurrency broke $65,000 for the first time since 2021 on Monday, putting bitcoin on the cusp of putting the cherry on top of its dramatic comeback.
Bitcoin is red-hot so far in 2024.
Bitcoin rose about 5% to over $66,000 by late morning, hitting its highest level since Nov. 15, 2021.
Bitcoin is now less than 4% shy of its record high of nearly $69,000 achieved during the brief 2021 spike, a seemingly achievable rally considering the ever-volatile bitcoin has risen by more than 50% over just the last month.
Largely driving the latest rally is ongoing bullishness from the spot bitcoin exchange-traded funds (ETFs) launched earlier this year—these ETFs now have almost $50 billion in assets under management and own 4% of all bitcoins, according to Bernstein data.
Optimism about an upcoming “halving” event, which typically drives bitcoin prices higher as lessened incentives for miners are thought to slow increased supply, and a broader uptick in equity prices have also boosted bitcoin.
Bitcoin’s total market capitalization stood at $1.29 trillion on Monday, according to CoinGecko, more than three times higher than the $320 billion market cap it had at the end of 2022 during the crypto winter.
Bitcoin is flirting with a record high valuation, but the crypto market’s total market cap of $2.55 trillion is well short of the record high of over $3 trillion hit in late 2021. That comes as bitcoin’s crypto market share ballooned from about below 40% to about 50% over the last two years, reflecting the collapse in value of several prominent digital assets. FTX’s crypto token, which had a peak market value of almost $10 billion in 2021, is now essentially worthless following FTX’s bankruptcy, Binance’s coin stands more than 40% below its Nov. 2021 level as the exchange grapples with significant legal troubles and dogecoin, the meme coin pushed by the likes of Elon Musk, is down about 40% from its Nov. 2021 market cap of almost $40 billion.
Managed by legacy asset managers like BlackRock and crypto-first firms like GrayScale, the 11 spot bitcoin ETFs hitting the market in January have enabled investors a lower-fee, easier-access way to put their money into bitcoin. Last week, BlackRock’s fund became the fastest ETF in history to reach $10 billion in assets under management. Publicly-traded stocks closely tied to bitcoin have outperformed the broader market this year; shares of crypto exchange Coinbase, leading bitcoin miner Marathon Digital and bitcoin investor MicroStrategy each hit multiyear highs this year.