Bitcoin hits fresh all-time high of $73,000, Ether inches near record high; what fuelled rally in cryptos?

Bitcoin (BTC) and the wider crypto market has witnessed a strong rally in recent times, especially in the last one month, as slew of positive developments have reignited investors’ appetite for highly riskier digital assets. The price of Bitcoin, the biggest cryptocurrency, surpassed $73,000 level for the first time on Wednesday, while Ethereum, the second largest crypto in terms of market capitalisation, crossed the $4,000 mark, inching close to its record high of $4,600 touched in November 2021.

In a remarkable comeback, Bitcoin price touched a new record high of $73,157.55 intraday today, rising as much as 1.7% in the past 24 hours. The market capitalisation (m-cap) of the world’s first decentralised cryptocurrency rose to $1.44 trillion. The BTC price has risen 46% in the last one month, from $50,000 level, while it surged 65% in the calendar year 2024. The counter has zoomed 176% in the last six months and more than 200% in a year, rebounding from $24,000.

Meanwhile, Ethereum price has climbed 53% in the last one month; 152% in six months; and 141% in the past one year. On year-to-date (YTD), the crypto price surged over 72%. In the past 24 hours, Ether rose 1.65% to $4,078, pushing its m-cap to $488 billion.

Among others, Binance Coin, Solana, XRP, Cardano, Dogecoin, Avalanche, Shiba Inu, and others also flashing in green today.

What fueled rally in crypto market?

According to market experts, the key reasons behind the recent rally in Bitcoin and other crypto coins are institutional allocation and increased retail participation in U.S.-based Bitcoin funds, including Spot exchange-traded funds (BTC ETFs). The sentiment was also lifted ahead of Bitcoin halving event due in April, which has historically impacted the demand for Bitcoin.    

Edul Patel, CEO and co founder, Mudrex, says there has been a steady rise of mainstream acceptance and investments from both retail and institutions since the Bitcoin spot ETF approval. “Now that Bitcoin surpassed the $73,000 threshold, the next target is at the $76,000 level.”

“BlackRock's Bitcoin ETF has outpaced MicroStrategy in accumulating Bitcoins within just two months of its launch showing the increasing demand. Blackrock's Bitcoin holdings now nears 204K, with assets under management exceeding $14.76 billion,” Patel adds.

Parth Chaturvedi, Investments Lead, CoinSwitch Ventures, says the current crypto market rally has taken even the most optimistic crypto supporters by surprise, as the price is being driven by the massive institutional interest, in the form of strong inflows into the recently launched Spot Bitcoin ETFs in the U.S. However, retail participation is still nowhere close to the mania seen in 2021, he adds.

“For investors, tracking these flows should be a strong indicator of future price action, as increased demand along with the upcoming reduction in supply (due to the fourth halving) could result in upward price movement. Around the estimated halving in April, traders can also expect heightened volatility as BTC’s price is now above its all-time high,” says Chaturvedi.

“Investors will need to be very careful and do their research while engaging with leverage, as liquidations could be triggered due to volatile movements,” he adds.

Jyotsna Hirdyani, South Asia Head at Bitget, says Bitcoin's status as a store of value asset has also improved as it has dethroned Silver as the world's 8th most valuable asset by reaching a $1.414 trillion market capitalisation.

“A huge number of analysts expect Bitcoin to hit a new record as high as $150,000 in this bull market. Based on our analysis, Bitcoin could potentially hit $120,000 -$140,000 any time after the halving.”

Considering the potential growth and the current market trends, investing in Bitcoin could be a promising opportunity given the high institutional confidence and adoption of the world's largest cryptocurrency, Hirdyani adds.

According to Sumit Gupta, Co-founder of CoinDCX, Bitcoin's recent surge showcases its resilience and the mainstream acceptance of crypto. This remarkable surge is largely attributed to escalating institutional interest in the crypto space.

“While Bitcoin ETFs have provided the initial push needed to kick-start a positive trajectory after more than two years of a crypto bear market, several important events are driving the market in the right direction. Ethereum’s Dencun upgrade, the ETH ETF SEC approval is in the pipeline, and the halving event looming just 36 days away are among these events. Beyond these individual events, what excites the entire ecosystem is the growing belief among traditional investment players in blockchain technology,” says Gupta.

Dhruvil Shah, SVP- Technology, Liminal believes that the FOMO (Fear of missing out) on soaring prices is undeniable, but the market's volatility and broader economic factors should be taken into account before making any investment decisions.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)