Bitcoin jumped to $63,000 for the first time since late 2021

Bitcoin climbed above $63,000 on Wednesday for the first time since late November 2021 as the spot bitcoin ETF products continue to draw huge inflows from investors around the world, while an upcoming reduction in Bitcoin’s supply growth, known as the “halving”, is also adding to the optimistic sentiment.

The world's biggest cryptocurrency by market cap gained over 5% to retest the $64,000 resistance level on Wednesday night, before pairing some gains to hover at $62,500 on Thursday morning.

In this context, Bitcoin has gained nearly 25% since last Friday, after holding above the key $50,000 support level, and has climbed almost 40% year-to-date.

BTC/USD, Daily chart

Bitcoin’s stellar performance has been driven by institutional investors, who invested hundreds of millions of dollars in Bitcoin and the crypto ecosystem via a series of spot Bitcoin ETFs-exchange-traded funds that started trading in early January 2024.

Institutional investors together with small traders and speculators can now gain widespread exposure to Bitcoin via the spot Bitcoin ETF, without buying it through crypto exchanges such as Binance, Coinbase, and other third-party trading platforms.

The well-awaited spot Bitcoin ETF became active in early 2024, after the U.S. SEC- Securities and Exchange Commission approved 11 Bitcoin ETFs on January 10, 2024, from top Wall Street investment houses, including BlackRock, Fidelity, and Cathy Wood’s ARK Invest.

Investors and crypto fans have been also biding Ethereum, the second largest cryptocurrency, which climbed to $3,500, after a 30% rally this year, while the major altcoin Solana hit a fresh record high of $133 this morning, up roughly 700% since early 2023.

The rally in the major digital tokens has also stoked speculative appetite for smaller tokens ranging from ADA, XRP, SUI, Dogecoin, and Shiba Inu, to FET, and others.

The Bitcoin “halving” event:

The next Bitcoin “halving” event will likely occur around April 24, 2024, and it is expected to significantly impact the price of the world's most popular cryptocurrency before and after the halving event.

The Bitcoin “halving” is the process that occurs about once every four years, or after the network has verified transactions on a total of 210,000 blocks, the amount of Bitcoin received by participants in the blockchain network underpinning the token slashed to 3.125 from 6.25.

Overall, the “halving” limits the number of Bitcoin in circulation, possibly lowering fresh supply on the open market. The prior “halvings” in 2012, 2016, and 2020 have resulted in rallies in the price of Bitcoin, adding to the overall capitalization of the crypto market.

The first halving in 2012 saw the price of Bitcoin shoot up from around $12 to around $130 six months later, according to data from crypto exchange Binance. Following the second in 2016, it soared from $660 to $900 in half a year. The third in May 2020: $8,600 to $15,700 by November that year.