Bitcoin surges past $60,000 to near its all-time high

World's biggest cryptocurrency has jumped more than 40% this year

The launch of Bitcoin exchange-traded funds in January has fuelled the token's rise this year. EPA

Bitcoin rose to $60,000 for the first time in more than two years, amid surging optimism that demand for the token is widening beyond committed digital-asset enthusiasts.

The world's largest cryptocurrency has jumped more than 40 per cent already this year, fuelled in part by the successful launch of US exchange-traded funds holding the coins that have attracted more than $6 billion since they began trading on January 11.

Bitcoin last traded at $60,000 in November 2021, after reaching a high of almost $69,000 that same month. As of 6pm UAE time on Wednesday, Bitcoin was up 6.24 per cent at $60,645.61.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime broker FalconX.

An imminent reduction in Bitcoin’s supply growth, known as the halving, is adding to the optimistic sentiment. That has helped to extend a prolonged rally that has also stoked speculative appetite for smaller tokens such as Ether and Dogecoin.

Bitcoin has more than tripled in value since the start of last year, climbing back from a 64 per cent plunge in 2022, in a remarkable comeback from a series of crypto-industry scandals and bankruptcies that raised questions about the viability of digital assets.

Digital tokens are buoyant even though investors have pared back expectations for looser monetary policy this year, demonstrated by a rise in US Treasury yields. Bitcoin has been outperforming traditional assets such as stocks and gold this year.

“This reversal is all the more impressive in the light of central banks signalling they intend to keep rates high a while longer, eroding the theory that the next crypto bull would be driven by dropping interest rates,” said Michael Safai, co-founder at quantitative trading firm Dexterity Capital.

The massive inflows into Bitcoin ETFs have prompted some industry watchers to warn of a looming supply squeeze as new coins from miners cannot keep up with demand.

Eighty per cent of Bitcoin’s supply has not changed hands in the past six months, potentially exacerbating the squeeze and adding to the upwards price pressure, analysts have said.