Bitcoin prices near record high.

 Bitcoin prices near record high.

Here's why:
Bitcoin continues its vertical rise, continues to rise rapidly, and is on the verge of hitting new all-time highs.

The digital token rose 8% on Monday to $67,310, well above its $44,000 valuation at the beginning of the year and less than $2,000 away from its November 2021 all-time high of about $69,000.

What drives the rally? Cryptocurrency experts say part of Bitcoin's rise is due to increased demand for so-called spot Bitcoin exchange-traded funds (ETFs). Experts say ETFs, which allow investors to tap into cryptocurrencies in a lower-risk way than in the past, have seen huge inflows this year.

"Investors are increasingly coming to grips with the fact that Bitcoin can be treated as an uncorrelated asset, making it very attractive for portfolio diversification," Joel Krueger, market strategist at digital currency exchange LMAX Group, told CBS Money Watch. I'm attracted to it," he said. Spot Bitcoin ETFs allow investors to gain direct exposure to Bitcoin without owning any Bitcoin. Unlike a regular Bitcoin ETF, whose underlying asset is a Bitcoin futures contract, the underlying asset of a Spot Bitcoin ETF is Bitcoin. Each Spot Bitcoin ETF is managed by a company that issues shares of its Bitcoin holdings purchased from other holders or through licensed cryptocurrency exchanges. The shares are listed on traditional stock exchanges. The U.S. Securities and Exchange Commission approved the sale of a spot Bitcoin ETF in January. Since then, investors have deposited about $7.35 billion into 11 different funds available, Bloomberg reported on Monday. Some of the world's largest institutional investors, such as BlackRock and Fidelity Investments, now offer spot Bitcoin ETFs.

Bitcoin's price rise began a few months before 2023, with the price rising to a 19-month high of around $41,000 in December. At the time, analysts cited three main factors for the rise: expected SEC approval of spot ETFs, expected Fed rate cuts, and the upcoming halving event, which will cut Bitcoin mining rewards in half. Of course, as Insider's investment correspondent Laila Maidan told CBS News in December, when Bitcoin topped a then-19-month high of $41,000, Even if this continues, it does not mean that the volatility of virtual currencies will decrease at all.

“This does not mean that cryptocurrencies will skyrocket and stay high,” Maidan said. “It’s still volatile and there are a lot of people trading all the time.”

Freshmind

Still, Bitcoin's resurgence is welcome news for crypto investors, many of whom saw their asset value declining in 2022 following the collapse of FTX and other crypto exchanges. Because Bitcoin is the world's largest cryptocurrency in terms of both trading volume and mining volume, it is often viewed by financial analysts as an indicator of the health of the crypto industry as a whole.

Freshmind