Cryptocurrency prices surged on Thursday as bitcoin and ether headed for a successful month, reflecting renewed investor interest and market optimism.
According to Coin Metrics, bitcoin rose by more than 5% to $63,252.82 on the final day of February, following a surge to $64,000 on Wednesday before a slight pullback. Ether also saw gains of over 6% to reach $3,483.81 on Thursday.
February’s performance was particularly notable after both coins had a relatively flat January. Bitcoin recorded a 47% increase for the month, marking its sixth consecutive month of gains and its best performance since December 2020, when it rose by 49.5%. Ether, meanwhile, surged by more than 50%.
The strong performance in February was also reflected in the popularity of bitcoin ETFs, which saw a record $677 million in daily net inflows on Wednesday alone, marking the third consecutive day of inflows above $500 million. Initially, outflows from the Grayscale Bitcoin ETF (GBTC), which had a head start on its rivals as the Grayscale Bitcoin Trust, had weighed on the bitcoin price. However, those outflows have now diminished.
Investors attribute February’s impressive gains to bitcoin’s supply and demand dynamics. Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, highlighted the impact of the new ETFs and the upcoming Bitcoin halving.
“We’ve seen over $2 billion coming into the various bitcoin ETFs, so there’s been this need to access more supply of bitcoin to build these ETFs, and that ends up driving prices up, particularly in the near term,” she explained. “The second reason why you might be getting some extra momentum in the price over the last couple of days is the upcoming halving,” she added. “Historically, the halving has led to bitcoin prices increasing… past performance is not indicative of future performance, but I do think there’s this belief that the halving process will result in the same level of price appreciation.”
The halving is a feature in the Bitcoin code that cuts the reward for mining bitcoin in half every few years, reducing the supply of bitcoin and creating a scarcity effect. The next halving is expected to occur in April, further fueling optimism among investors.
(Source: CoinDesk | Coin Metrics)
