NEW YORK, March 1, 2024 — Just seven weeks after the Securities and Exchange Commission approved the first batch of spot Bitcoin ETFs, the adoption of these investment vehicles is propelling cryptocurrency prices to heights not seen since late 2021.

On Thursday, BlackRock’s leading Bitcoin ETF saw a record inflow of $612 million, pushing its assets under management past $10 billion. This follows a dramatic spike in trading volume, which reached a peak of $7.7 billion, with $4.7 billion in volume reported the day before. Despite a slight decrease in flows on Thursday, Bloomberg analyst James Seyffart highlighted that the $4.7 billion volume would have set a new record if not for the prior day's figure.

Bitcoin’s price surge, surpassing $60,000 on Wednesday, has been fueled by the momentum generated by these ETFs. The increasing popularity of Bitcoin ETFs is evident, with traditional brokers like Morgan Stanley exploring the inclusion of spot Bitcoin ETFs on their platforms.

While Bitcoin's ascent is lifting other cryptocurrencies such as Ether and Dogecoin, there are potential challenges on the horizon. Grayscale’s Bitcoin ETF, which charges higher fees compared to its peers, has faced significant outflows, including $600 million on Thursday.

JPMorgan analysts have noted that the forthcoming Bitcoin halving, which will reduce miners' rewards, could potentially increase Bitcoin’s production costs and decrease the number of active miners. As a result, they forecast that the halving event might lead to a drop in Bitcoin’s price, possibly falling back to $42,000.