by Amanda Cooper

LONDON (Reuters) – Bitcoin crossed the $60,000 threshold on Wednesday, a first in more than two years, amid an influx of capital into new ETFs backed by the most famous cryptocurrency.

Exchange-traded funds (ETFs) based on bitcoin were validated in January by the Securities and Exchange Commission, the American stock market watchdog. This allowed bitcoin to gain 42% in February, which is expected to be its largest monthly gain since December 2020.

Around 3:10 p.m. GMT, bitcoin advanced 7.2% to $60,813.57, the highest since November 2021. The electronic currency is also heading towards its strongest weekly increase in a year, with at this stage a gain of 18, 5%.

Investors flocked to bitcoin before the “halving” planned for April, an operation which will result in a halving of the reward for miners, thus reducing the supply of new bitcoins by half. The prospect of a rate cut by the US Federal Reserve (Fed) this year has also boosted investors’ appetite for higher-yielding or more volatile assets.

“Bitcoin is boosted by support from a steady inflow into new spot ETFs and the prospect of a planned halving in April, as well as an anticipated Fed interest rate cut in June” , said Ben Laidler, global markets strategist at investment platform eToro.

MORE THAN .000 BILLION CAPITALIZATION FOR BITCOIN

The value of all bitcoins in circulation exceeded $2 trillion this month, a first in two years, according to crypto platform CoinGecko, while the price of the token itself doubled in four month only.

Bitcoin-backed ETFs saw a definite resurgence of interest this week: the three most popular, managed by Grayscale, Fidelity and BlackRock, saw their trading volumes increase.

On Monday and Tuesday, some 110 million shares of these three funds changed hands, which represents on a comparative basis about 51% of the 215 million shares traded in the most valuable companies in the world – Apple, Microsoft and Nvidia, according to LSEG data.

This percentage was closer to 15% just three weeks ago.

“Basically, we are seeing an effect from ETFs faster than expected. Inflows picked up quickly last week and have held steady, and we think that has to do with the fact that shareholder advisory firms have started very quickly to sell the ETFs to their clients,” said Joseph Edwards, head of research at Enigma Securities.

LSEG data showed that flows into the 10 largest spot bitcoin ETFs brought in $420 million on Tuesday alone, the highest amount in nearly two weeks.

The second cryptocurrency in the world, ether is currently increasing by 3.13% to 3,351.4 dollars after hitting a two-year record during the session, at 3,370.93. This currency has gained 47% since the start of February, its largest monthly gain since a 70% rally in July 2022.

Some investors expect U.S. regulators to also approve applications for spot ether-based ETFs.

(With contributions from Elizabeth Howcroft in London and Medha Singh in Bangalore; Claude Chendjou, edited by Blandine Hénault)

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