Currently, Bitcoin (CRYPTO: BTC) is displaying strong momentum, with a remarkable 20% increase over the past week and nearly 50% growth for the year. Priced around $62,000, Bitcoin is approaching its previous all-time high of $69,000.
Considering this surge, investors may wonder if now is the opportune moment to heavily invest in Bitcoin, given the growing interest from Wall Street. Alternatively, they may seek alternative investment options. Let’s delve deeper into the analysis.
The Argument for Investing in Bitcoin: Bitcoin’s notable performance this year can be primarily attributed to the introduction of new spot Bitcoin exchange-traded funds (ETFs) in January. These ETFs have witnessed exceptional success, evident from the significant inflows they’ve received.
For instance, the iShares Bitcoin Trust (NASDAQ: IBIT) by BlackRock, established just over a month ago, has quickly amassed 100,000 Bitcoin, with daily investor inflows averaging $500 million. Currently holding nearly $7 billion in assets under management, this ETF’s continued inflows signal ongoing investor interest.
It’s worth noting that besides the BlackRock Bitcoin ETF, there are two other spot Bitcoin ETFs managing assets exceeding $1 billion each. Given this robust buying activity, Bitcoin remains an attractive investment option. A decline in net ETF inflows could potentially signal a loss of momentum in Bitcoin’s rally, but this isn’t the case presently. Institutional allocations to Bitcoin appear to be increasing.
Additionally, the upcoming Bitcoin halving scheduled for April is a significant factor to consider. These halving events, occurring once every four years, reduce the rate of new Bitcoin production by half and are eagerly anticipated by the crypto market. Historically, they’ve sparked substantial rallies in Bitcoin’s price.
In the past three Bitcoin halving cycles (2012, 2016, and 2020), the price of Bitcoin surged to new all-time highs. With the halving nearing and Bitcoin already nearing the $69,000 level, it seems highly likely that Bitcoin will achieve a new all-time high before summer begins.