Bitcoin hits new record as money flows into cryptocurrencies

(CNN) — Bitcoin reached its all-time high this Monday, shaking off more than two years of decline that had cast doubt on the future of the entire cryptocurrency ecosystem.

Bitcoin, the world’s first and largest digital currency, traded at $68,791, surpassing the previous record of $68,789 reached on November 10, 2021.

Bitcoin’s rally in recent months has been fueled by U.S. regulators’ approval of exchange-traded funds linked to the digital asset, paving the way for more traditional investors to get into Bitcoin and their wallets.

That approval required years of lobbying by cryptocurrency companies and was granted reluctantly by the Securities and Exchange Commission after a court ruled that the regulator’s reasons for rejecting Bitcoin ETF applications were “arbitrary and capricious.”

The first 11 “spot” Bitcoin ETFs, which track the asset’s market price in real time, launched in January.

ETFs generated more than $4.2 billion in net new flows for the month, according to Bloomberg.

ETFs are investment vehicles that track a basket of assets but trade like stocks. Part of the appeal of a Bitcoin ETF is that investors can access Bitcoin through their regular brokerage firm, rather than setting up a digital wallet through a cryptocurrency exchange.

Bitcoin is the benchmark for the cryptocurrency sector, whose reputation has been damaged by a series of negative events that have made headlines: high-profile bankruptcies of exchanges and lenders, volatile price swings and the prosecution of Sam Bankman-Fried, a former cryptocurrency celebrity. who was convicted in November of stealing billions of dollars from customers of his exchange FTX, which collapsed at the end of 2022.

Bitcoin, which represents more than half of all cryptocurrencies in circulation, has risen more than 200% in the past 12 months, according to CoinMarketCap.

Bitcoin’s rally is also being fueled by cryptocurrency devotees who expect even more gains this spring following an event known as the “halving.” Every four years or so, the number of Bitcoins in circulation is cut in half, a characteristic inherent in a cryptocurrency that is by design limited. As Bitcoin approaches scarcity, its value is expected to rise.