Wednesday saw the passing of the $60,000 threshold for Bitcoin, bringing it closer to its peak and continuing its unchecked ascent since the adoption of a new kind of investment that is correlated with the cryptocurrency.

Bitcoin was trading at almost $60,301 at 13:25 GMT, getting closer to its all-time high of $68,991, which was reached in November 2021 and is, according to some analysts, currently achievable.

Exchange-traded funds (ETFs) linked to Bitcoin were approved by US securities authorities on January 10. This means that, in theory, a larger audience may now invest in the cryptocurrency without having to own it personally. Nonetheless, the funds themselves make investments in virtual money.

The price of the new investment product had risen in previous months due to expectations of approval, but it had mostly dropped by the end of 2022 as a result of the collapse of numerous major cryptocurrency companies.

According to Mikkel Morch of specialized fund ARK36, the introduction of exchange-traded vehicles, or ETFs, in the US has "injected a fresh wave of optimism, propelling trading volumes and spotlighting crypto-linked firms".

From an accessibility perspective, the products are similar to equities or mutual funds for regular investors.

Following the fund's conversion into an ETF, a wave of large withdrawals from the GBTC (Grayscale Bitcoin Trust) fund was originally caused by some investors seeking to recover their losses.

However, once the selling frenzy passed, money started flowing into US bitcoin ETFs, including the one run by the massive asset management company BlackRock.

Since the beginning of the year, exchange-listed investment products tied to crypto assets have drawn almost $5.7 billion, according to figures released on Monday by asset management CoinShares.

'Institutional endorsement'

Software company MicroStrategy claimed on Monday that it had bought an additional 3,000 bitcoins, which were then valued at $155 million, as more proof of "the growing institutional endorsement that's fuelling this rally" in prices, according to Morch.

With this transaction, their total Bitcoin holdings increased to 193,000 (or around $6.09 billion).

When powerful computers solve challenging puzzles to confirm transactions performed on the blockchain, bitcoin is generated, or "mined," as a reward.

According to Tickmill analyst James Harte, prices are also supported by large industry participants investing in bitcoin before the "halving"—that is, the splitting of the incentive for the token's miners in half.

The next due date for about every four-year occurrence is in April.

It is anticipated to decrease the rate at which new bitcoins are introduced to the market, hence decreasing the amount of bitcoins that might be bought, thus increasing its value.

"The current scarcity of the digital asset becomes even more pronounced as the issuance of new bitcoin slows down, typically leading to increased demand and, subsequently, higher prices," said Nigel Green, head of financial advice company deVere Group.

He continued: "Cryptocurrencies remain highly speculative, but the enormous interest in spot ETFs and the upcoming halving event... can be expected to continue to fuel the current momentum which could lead bitcoin to surpass the $69,000 mark."

The expectation that the US Federal Reserve would begin to reduce interest rates this year as inflation starts to decline has also helped the virtual unit.

End//voice7news.tv