Bitcoin, the largest cryptocurrency by market capitalization, reached a new milestone on Tuesday, surpassing its previous all-time high of $69,000, which was set in November 2021. The historic moment marked the end of a long and volatile journey for the digital asset, which has seen ups and downs in the past two years.

According to CoinMarketCap, Bitcoin has increased over 60% in the month and about 205% in the year, taking its market cap to over $1.35 trillion, equivalent to the global supply of silver. The new high also happened ahead of Bitcoin’s halving event, which is expected to happen in mid-April and reduce the supply of new bitcoins by half.

What’s driving the Bitcoin rally?

Several factors have contributed to the surge in Bitcoin’s price and popularity in recent weeks. One of them is the approval of several spot exchange-traded crypto products (ETCPs) in the U.S., which have attracted new institutional and retail investors who want to gain exposure to Bitcoin without having to deal with the technical and regulatory challenges of owning and storing it.

According to Blockworks, the total market cap across the spot Bitcoin ETCPs is $53.74 billion, with a trading volume of $1.81 billion in the past 24 hours. The issuers of these products have also been buying more bitcoins than the miners have been producing, creating a supply-demand imbalance that pushes the price up.

Another factor is the anticipation of lower global interest rates, which makes Bitcoin more attractive as a hedge against inflation and currency devaluation. As central banks around the world have been printing money to stimulate the economy amid the COVID-19 pandemic, some investors have been looking for alternative assets that have a limited and predictable supply, such as Bitcoin.

How high can Bitcoin go?

As Bitcoin reaches new heights, many experts and analysts have different opinions and predictions about its future potential and challenges. Some are bullish and optimistic, while others are cautious and skeptical.

Ben Caselin, CMO of VALR, a South African crypto exchange, says that Bitcoin could double in size within a matter of weeks, given that there are no technical indicators or historical levels to reference and that the ETCPs are still in the process of being made available to the wider investment community.

James Hallam, Head of BizDev at dYdX Foundation, a decentralized trading platform, says that Bitcoin’s new all-time high is a sign of its potential to redefine the financial landscape and gain more acceptance and integration into mainstream finance.

Antoni Trenchev, co-founder of Nexo, a crypto lending and borrowing platform, says that Bitcoin’s price is still far from its intrinsic value and that the road ahead is open for more growth and innovation.

However, not everyone is convinced that Bitcoin is a good investment or a viable currency. Some critics point out the risks and challenges that Bitcoin faces, such as regulatory uncertainty, environmental impact, security breaches, scalability issues, and volatility.

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Bitcoin Halving: What Is It and Why Does It Matter?

• Bitcoin halving is a periodic event that occurs about every four years, in which the reward for mining a new block of transactions is reduced by half.
• The halving is designed to control the supply of Bitcoin over time and ensure that it reaches its maximum limit of 21 million coins, which is expected to happen in the year 2140.
• The halving affects the profitability and incentives of the miners, who secure the network and validate the transactions. It also affects the supply and demand of Bitcoin, which influences its price and value.
• The next halving is expected to happen in mid-April 2024, when the block reward will drop from 6.25 bitcoins to 3.125 bitcoins. This will be the fourth halving in Bitcoin’s history, following the previous ones in 2012, 2016, and 2020.

Bitcoin ETCPs: What Are They and How Do They Work?

• Bitcoin ETCPs are exchange-traded products that track the price of Bitcoin and trade on regulated stock exchanges, such as the New York Stock Exchange or the Nasdaq.
• Bitcoin ETCPs allow investors to gain exposure to Bitcoin without having to buy, store, or manage it directly. They also offer more liquidity, transparency, and security than other crypto investment vehicles, such as trusts or funds.
• Bitcoin ETCPs are different from Bitcoin ETFs, which are exchange-traded funds that hold physical bitcoins in custody and are subject to more stringent regulatory requirements and approvals. Bitcoin ETFs have not been approved in the U.S. yet, but they are available in other countries, such as Canada and Brazil.
• Some of the most popular Bitcoin ETCPs in the U.S. are: