Why Is Bitcoin Going Up? (2024)

Bitcoin (BTC) set a new all-time intraday trading high on Tuesday morning when it topped the $69,000 level for the first time ever.

Although BTC could not maintain those elevated levels, the world’s oldest cryptocurrency has been on a steady upward trajectory since September of last year.

Even after tumbling back to $67,000, today’s gains bring Bitcoin’s total return for 2024 to more than 51% year-to-date with a better than 8% gain just over the last 24 hours.

By breaking through the previous all-time intraday trading high of $68,990, BTC has now not only regained all the ground it lost since the onset of crypto winter in May 2022, but it has also set new all-time highs for the first time since November 2021.

In addition, Ethereum (ETH) has been gaining alongside BTC. ETH is up more than 11% over the past 24 hours as well. The leading altcoin is now worth more than $3,800, which is a significant gain, but still off its pre-crypto winter high of more than $4,700 set in November 2021.

Why Is Bitcoin Going Up Right Now?

The current bullish sentiment in bitcoin comes from the cryptocurrency’s price riding a wave of investor optimism surrounding the U.S. Securities and Exchange Commission’s approval of 11 spot bitcoin exchange-traded funds, or ETFs, in mid-January.

Spot bitcoin ETFs allow for the institutional trading of bitcoin at its spot, or current, price. Previous bitcoin ETFs could only trade bitcoin futures. Futures are complex derivative instruments suitable for trading only by experienced investors.

Just as expected, opening up the world’s oldest cryptocurrency to institutional investors has provided a significant price catalyst.

BlackRock’s iShares Bitcoin ETF (IBIT), one of the 11 new spot bitcoin ETFs, purchased more than $778 million worth of BTC on Tuesday morning alone. That adds up to 12,600 bitcoins flowing into IBIT’s coffers, which reduces the world’s total supply and with the help of rising demand, increases BTC’s overall value.

In the wake of the SEC’s approval of the first U.S. spot bitcoin ETFs, BTC has jumped from under $50,000 at the time of approval to top $69,000 this morning, rising more than 51% year-to-date.

Is a Bitcoin Price Correction Coming Soon?

With the heights bitcoin has now reached, the fear of a price correction is percolating in some traders’ minds. Although bitcoin has been climbing steadily higher since the U.S. introduced spot bitcoin ETFs, cryptocurrencies, including bitcoin, have a history of extreme volatility.

Bitcoin and other cryptocurrencies suffered after a wave of bankruptcies, collapses and negative rulings rocked the crypto world in 2022.

First, there was Terra’s LUNA coin debacle, which kicked off crypto winter that May.

After a brutal summer for crypto investors, the collapse of leading crypto exchange FTX in November of that year looked like the final nail in the crypto coffin.

Then, throughout 2023, both the SEC and Commodity Futures Trading Commission brought numerous regulatory lawsuits against some of the largest crypto exchanges and companies. Those suits hampered many exchanges and other crypto companies’ abilities to do business in the U.S., the world’s largest economy.

During that period, bitcoin dropped from its pre-crypto winter high of nearly $65,000 to a bottom of almost $16,000 before starting its recovery. That was a 75% swing in price in just over one year.

What Does Bitcoin’s Bounce Mean for Investors?

Although bitcoin appears to be in the midst of a significant bull run, there is of course no way to know how high the cryptocurrency will go before seeing another correction.

While it’s looking more and more like bitcoin is on a long-term rise again, the reality is that we are in unprecedented territory regarding a number of factors, including the geopolitical climate, economic indicators, crypto regulations and the Fed’s intentions regarding interest rates.

Cryptocurrency industry investors have learned that even in the best of times, predicting the short-term price action of digital assets is difficult. That holds particularly true in this market environment.