Unpacking bitcoin’s recent resurgence

The price of bitcoin crossed $72,000 for the first time yesterday, setting a new all-time high and bringing all the crypto bros back out of hiding. Bitcoin is now up ~65% since mid-January.

What’s driving the resurgence? A large part of the recent gains can be attributed to the SEC’s mid-January approval of bitcoin exchange-traded-funds (ETFs), which enable investors to track the price of bitcoin without actually owning any of it themselves.

• Total assets in the 10 bitcoin ETFs on the market currently sit at over $50 billion.
• BlackRock’s iShares Bitcoin Trust eclipsed $10 billion in assets on February 29, the fastest a new ETF has ever reached that milestone.
• As of March 1, ~4% of the global circulating supply of bitcoin was tied up in the new ETFs, according to crypto asset manager Galaxy Digital.

This bitcoin bull run could be different. The emergence of ETFs shows there is now “institutional maturity” in the cryptocurrency market, Jeff Billingham, director of strategic initiatives at research firm Chainalysis, told The Guardian. Translation: these institutions aren’t FTX and actually have some guardrails; no Bahama-based, Hype House-style freewheeling here.

👀 Looking ahead… The next bitcoin halving event, where the reward for mining bitcoin is cut in half in order to reduce new supply, is scheduled for April. Prices historically increase around halving events.