Bitcoin (BTC) hit its highest price since December 2021, boosted by a record debut by U.S. exchange-traded funds.

The cryptocurrency rose more than 2.1% to US$49,130, surpassing last year’s highs. This occurred a few weeks after ETFs were approved in January. Likewise, Bitcoin is poised for a seventh consecutive gain, which would become the longest streak since a year ago if the trend can be sustained.

Nine U.S. spot Bitcoin exchange-traded funds debuted on Jan. 11, while the decade-old Grayscale Bitcoin Trust became an ETF on the same day. The accessibility of ETFs promises to broaden the token’s investor base. The new funds have attracted a net of around US$8 billion so far, while the Grayscale fund’s outflow of more than US$6 billion since its conversion now appears to be losing steam. Bitcoin last traded at US$50,000 in December 2021. The price is still below the all-time high of nearly US$69,000, reached in November 2021.

The resurgence in cryptocurrency prices comes as investors in the broader financial markets again embrace risk amid expectations that the Federal Reserve is moving closer to easing monetary policy. Higher interest rates dull the appeal of riskier assets, such as cryptocurrencies.

Bitcoin’s next Halving will be different

This assertion occurred in a report recently published by Grayscale, where the firm extensively addressed this premise by developing a series of aspects, concluding that the digital currency will be significantly boosted and benefited after the next cut to rewards scheduled for the coming months.

In this regard, Grayscale positively highlights the arrival of spot Bitcoin ETFs, of which its Grayscale Bitcoin Trust (GBTC) is listed as the fund with the highest trading flows and the most significant amount of BTC under management. This development has transformed the cryptocurrency market we knew until a few years ago, leading to greater adoption by institutional investors and making it one of the leading products worldwide.

They also touched on the increased activity on the network, which now supports other types of assets such as Ordinals and BRC-20 tokens, further expanding its functionality and deriving more significant benefits for the mining community. As for the latter, figures published in the report point to miners recording profits of more than 200 million USD so far in February this year.

Taking all this into account, Grayscale analysts agree with many other enthusiasts of the ecosystem and project that after the next halving of the Bitcoin network, the leading cryptocurrency will have everything it needs to head towards new all-time highs, as the supply cut coupled with a notable increase in demand creates the conditions required for an organic rise in its prices.

In 2012, 2016, and 2020, the previous three halvings reduced the rewards for each block produced to about 25, 12.5, and 6.25 BTC, respectively, maintaining Bitcoin’s average block time of approximately 10 minutes.

After the cut that will take place next April, the issuance of new bitcoins will remain at about 3.125 units per mined block.