Bitcoin is nearing a significant milestone with its fifth consecutive month of gains, setting a record for the longest rally since the pandemic.
This leading digital currency rose about 2% in January, influenced by the introduction of the first U.S. market-traded Bitcoin funds and shifts in monetary policy.
Should this rise continue, it would beat the previous record of a six-month increase from October 2020 to March 2021.
At that time, Bitcoin peaked at nearly $69,000. The launch of U.S. market-traded funds by giants like BlackRock Inc. and Fidelity Investments on January 11 has played a crucial role.
Before these funds, Bitcoin had already surged 160% the previous year, fueled by the prospect of attracting new investors.
Despite an initial 21% drop over 12 days following the fund launches, Bitcoin’s value is recovering.
This drop occurred as Grayscale’s $21 billion Bitcoin Trust transitioned into an ETF. This change initially led to withdrawals, but the pace has slowed, supporting Bitcoin’s recovery.
Sean Farrell from Fundstrat Global Advisors LLC points out that the reduced outflows from Grayscale’s fund are boosting market morale.
The 10 new ETFs have collectively attracted $817 million, marking a historic success in trading and investment flow.
Investors are closely watching the Federal Reserve’s upcoming interest rate decision.
Significant changes in March’s rate cut expectations could influence Bitcoin and the broader crypto market. This is due to their sensitivity to liquidity and market sentiment.
As of Tuesday morning in New York, Bitcoin’s price stabilized at $43,420. Other cryptocurrencies like BNB and Cardano are also trading within narrow ranges.
This situation highlights Bitcoin’s critical role in the cryptocurrency market and its impact on wider financial trends.