It’s been a busy year so far for bitcoin, the largest cryptocurrency by market capitalization, and it’s only March. The digital asset hit a new all-time high for the first time since November 2021 when it passed $69,000 on Tuesday morning, as demand surged in recent weeks following the spot bitcoin ETF approvals in the U.S. and the pending bitcoin halving in late-April.
Bitcoin has increased over 60% on the month and about 205% on the year, according to CoinMarketCap data. The total crypto market cap across all tokens has increased 18% to $2.55 trillion, on the week, with bitcoin’s dominance making up 52% of that amount.
The new high happened ahead of bitcoin’s halving event, which is expected to happen in mid-April and occurs about every four years.
Bitcoin halving, which is usually referred to as “the halvening,” is a periodic decline in bitcoin mining rates, which means the number of bitcoin miners can potentially get for each block mined is cut in half. This process is meant to control the supply of bitcoin over time and once the number of bitcoin in circulation hits 21 million, its total supply, the process will end. The last halving is not expected to occur for more than 100 years, though.
In the past, bitcoin halvings have brought increased interest for the asset given that the demand typically outweighs the supply, with its price typically rising in the months following the event.
The price jump increase is also being driven by the 11 spot bitcoin ETFs the U.S. Securities and Exchange Commission approved in January. Those ETFs have brought in new institutional investors and retail investors who operate through financial advisors. As a result, mass amounts of institutional dry powder that was waiting on the sidelines took action.
Recently, the number of bitcoins being purchased by ETFs has also outweighed the number of new bitcoins being produced by miners, according to HODL 15 Capital data, shared on X by Bitwise Asset Management CIO Matt Hougan.
The issuers of those ETFs have seen demand spike beyond initial predictions of a few billion. The total market cap across the spot bitcoin ETF products is $53.74 billion, according to Blockworks data. Trading volume across 24 hours was $1.81 billion.