Bitcoin price: why did it exceed $60,000?

How high will bitcoin go? That's the question many are asking as the market's leading cryptocurrency broke the $60,000 barrier this Wednesday for the first time since November 2021. Back then, bitcoin hit its all-time high of $69,000.

While we wait to see whether Satoshi Nakamoto's invention will break the $69,000 mark again, here are the main reasons why bitcoin is making such progress:

The launch of Bitcoin ETFs in the US has significantly expanded Bitcoin's investor base. Since 11 January, nearly $7 billion has been injected into the markets via ETF Bitcoin Spot. Never before has an ETF launch, taking all assets together, collected so much. Some analysts are expecting a net inflow of $14bn or $15bn over the whole of 2024, but this could be much higher.

On the macroeconomic front, factors such as expectations of interest rate cuts by the US Federal Reserve have made bitcoin much more attractive compared with traditional assets.

In an environment where the attractiveness of traditional currencies and assets is diminishing due to inflation, geopolitical tensions and uncertainties surrounding the strength of the US dollar, bitcoin appears to be a reliable store of value.

The proximity to the Bitcoin halving scheduled for April 2024 is another key factor: the Bitcoin halving is a scheduled event that halves the issuance of new bitcoins. This event occurs approximately every four years (every 210,000 blocks, to be precise) and makes Bitcoin, which is in limited supply (21 million), even rarer. At each halving, the price of bitcoin has risen sharply.

Recent regulatory developments, particularly in the US and Europe (MiCA), have created a more favourable framework for the sector - the approval of Bitcoin Spot ETFs is one of them.