Market hype: why the Bitcoin rate exceeded $64 thousand for the first time since November 2021

On Wednesday, February 28, the price of Bitcoin reached its highest level in almost 2.5 years.

During trading, the rate of the electronic coin rose by approximately 12.2% and for the first time since November 2021 reached $64 thousand. This data is provided by the CoinMarketCap portal.

Following Bitcoin, other cryptocurrencies showed similar dynamics.

For example, Ethereum rose in price by 7.6%, to $3.49 thousand - the highest level since April 2022.

At the same time, ripple quotes grew by 3.4% to $0.61, and litecoin by 5.4% to $77.94.

The total value of all cryptocurrencies has grown by almost $180 billion over the past 24 hours and was currently approaching $2.33 trillion.

The last time such a high figure could be observed was back in December 2021.

In just a month, the price of Bitcoin has increased by more than one and a half times.

According to experts, the rate is growing confidently on the eve of the next halving - a change in the rules for mining digital coins.

Traditionally, the event occurs every four years and is one of the determining factors for the dynamics of the global cryptocurrency market.

Let us remind you that Bitcoin exists on the basis of blockchain technology - a single database that contains information about all completed transactions.

The emission of new cryptocoins occurs through mining - solving complex mathematical problems and the appearance of a new block in the blockchain network.

Each such block is an array of data that contains information about all transactions carried out after the creation of the previous block.

Miners receive bitcoins as a reward for solving the problem.

Currently, about 19.64 million electronic coins have already been mined in this way.

At the same time, according to the developers, unlike endlessly printed paper money, the number of bitcoins is limited and can be a maximum of 21 million.

Meanwhile, every year the issue of cryptocurrency becomes more difficult and requires more and more computing power, and the reward for mining decreases.

So, in 2009 it was 50 bitcoins per block, in 2012 it dropped to 25 coins, in 2016 - to 12.5, and in 2020 - to 6.25.

The next halving should happen in mid-April 2024.

After this, the miners’ reward will again be halved and will be slightly less than 3.13 bitcoins.

“As a result, the amount of assets produced will decrease sharply.

Against this background, institutional and retail investors are now seizing the moment and are actively purchasing crypto coins in order to get maximum profit before Bitcoin begins to fall in price.

This usually happens within the first three months after the halving,” Fedor Sidorov, founder of the School of Practical Investment, told RT.

In addition to the expected halving, the rapid rise in price of the cryptocurrency may be due to the growing demand for it from Bitcoin ETFs, which are now being actively launched in the United States, Sidorov noted.

Let us clarify that we are talking about special funds whose securities are traded on the stock exchange at the price of an electronic coin.

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“Judging by the current dynamics, in the next few months the price of Bitcoin may update its historical maximum and rise to $70 thousand or even higher.

The growth in quotations will most likely continue until about mid-summer, after which there may be a period of falling prices for Bitcoin and other leading cryptocurrencies,” suggested RT’s interlocutor.

A similar point of view is shared by BitRiver financial analyst Vladislav Antonov.

According to his assessment, until the halving, the Bitcoin rate may continue to trade in the range of $61.5-64.5 thousand, after which the price is likely to fall as investors want to lock in the profits and begin to sell the asset en masse.

“It is important to understand that cryptocurrency is an extremely volatile asset.

The market as a whole is low-liquid, so there is always a risk of a price collapse.

However, Bitcoin survived any crisis, becoming only more attractive to investors,” Antonov added in a conversation with RT.

Note that the Bitcoin price reached its highest point during the entire period of observation on November 10, 2021 - then the rate rose to $69 thousand. Following this, quotes began to fall and already in January 2022 dropped to $33 thousand, and by the end of autumn they dropped to $15.5 thousand. However, after such a sharp collapse, the electronic coin began to gradually rise in price again.