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Bitcoin surges above $72,000 as demand frenzy pushes it to a new record high

Amid other factors, Bitcoin's rally also come ahead of the "halving" event, scheduled for April.

Bitcoin Crypto

Bitcoin on Monday shattered its previous record and surged past $72,000 for the first time ever. The rally was fuelled by optimistic market sentiment, regulatory changes, and the anticipation of reduced supply.

Bitcoin was trading at $72,248, after touching its peak at $72,739 on Monday. Ether, the second-largest cryptocurrency, is also experiencing a surge, climbing above $4,000 for the first time since late 2021. Smaller altcoins like Binance Coin and Shiba Inu have also seen significant gains.

The rally has been attributed to several factors including an influx of investments into new spot Bitcoin exchange-traded funds (ETFs) and expectations of an interest rate cut by the Federal Reserve. Another key factor is the impending “halving” event, scheduled for April. This is a periodic mechanism that reduces the rate at which new Bitcoins are generated, potentially tightening supply. Historically, such events have buoyed the cryptocurrency’s price.

Meanwhile, a simultaneous softening stance on digital assets by regulators like the UK’s Financial Conduct Authority also contributed to the rally. According to a report by Financial Times, the FCA has allowed recognized investment exchanges to launch crypto-backed exchange-traded notes, albeit with restrictions to protect retail investors. This move further legitimizes cryptocurrency as a financial asset among professional investors.

Additionally, ahead of the U.S. elections, former President Donald Trump, a previous critic of cryptocurrencies, has reportedly chimed in with a more favorable stance. Now a potential contender for the 2024 election, Trump described Bitcoin as a “form of currency” and indicated a less restrictive approach to digital assets if re-elected.

This latest milestone marks a significant comeback for Bitcoin, which had plummeted during a “crypto winter” period in recent years characterized by a series of corporate bankruptcies and scandals that plagued the market. The price has skyrocketed nearly 70% since the start of 2024, surpassing the highs of 2021 before a series of scandals and crashes sent the market tumbling.

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