Bitcoin hit almost $60,000 for the first time in more than two years, which is just $10,000 less than its record high back in November 2021.
The surge in prices gained momentum in January following the first-ever approvals in the US of spot exchange-traded funds (ETFs) for Bitcoin, which brought 'billions of dollars worth of institutional investment' to the market for the first time.
The latest 42% price rally caused the world's biggest cryptocurrency to reach a record high, with Bitcoin also on track for its most significant week-on-week gain in a year, climbing 18.5% since February 2021.
Considering Bitcoin was trading below $20,000 just a year ago, this is an impressive turnaround.
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This week’s price rise coincides with a record-breaking day in trading volume for Bitcoin spot ETFs.
The jump has sparked a rally in other major cryptocurrencies like Ethereum, which surpassed the $3,000 mark - its highest price since April 2022.
Global markets strategist at retail investment platform eToro, Ben Laidler, said: 'Bitcoin is being driven by the support of consistent inflows into the new spot ETFs and outlook for April's halving event and June's Fed interest rate cuts.'
According to crypto platform CoinGecko, the value of all the Bitcoin in circulation has exceeded $2 trillion this month for the first time in two years, whilst the token's price itself has doubled in four months.
So, what's the reason for the sudden increase?
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Simon Peters, market analyst at eToro, explained: 'The driving force behind the price move seems to be from the recently approved bitcoin spot ETFs continuing to acquire bitcoin in significant quantities.
'Since launch, the bitcoin spot ETFs have amassed holdings that represent over 3 per cent of all bitcoin currently in existence. This milestone highlights a growing trend of institutional investors wanting to get exposure to bitcoin.
'I expect this trend to continue and it is possible that we could see bitcoin make a new all-time high (with the price going above $69,000) in the coming weeks.'
Research analyst at Fineqia International, Matteo Greco, proposes that this all-time high is just the beginning, saying: 'Personally, I believed and still believe new highs in 2024 are possible.'
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'Whilst I don’t anticipate we’ll see as significant a percentage gain this time round (as typically the percentage gain from halving to all-time high has decreased each cycle), it is very possible that we could see the peak of the bull market somewhere in the six figures,' Peters concluded.