Bitcoin is once again making headlines as its price surges towards its all-time high

 Bitcoin is once again making headlines as its price surges towards its all-time high, with Monday seeing an 8% climb to reach $67,310. This impressive resurgence marks a significant increase from its $44,000 valuation at the beginning of the year and places it tantalizingly close to surpassing its previous record high of around $69,000 set in November 2021.

What's behind this rally? Cryptocurrency experts attribute bitcoin's soaring value in part to the growing demand for spot bitcoin exchange traded funds (ETFs). These ETFs offer investors a less risky way to invest in crypto, attracting a substantial influx of capital this year.

Investors are drawn to bitcoin as an uncorrelated asset, making it an attractive option for diversifying investment portfolios," explains Joel Kruger, a market strategist at digital currencies exchange LMAX Group. Spot bitcoin ETFs provide investors with direct exposure to bitcoin without the need to hold the digital currency themselves. Unlike traditional bitcoin ETFs, which use bitcoin futures contracts as underlying assets, spot bitcoin ETFs hold actual bitcoins purchased through other holders or authorized cryptocurrency exchanges. These ETFs are managed by firms that issue shares based on their bitcoin holdings, which are then listed on traditional stock exchanges.

The approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission in January paved the way for a surge in investment, with approximately $7.35 billion deposited into the 11 different funds available since then. Notably, major institutional investors such as BlackRock and Fidelity Investments now offer spot bitcoin ETFs.

Bitcoin's price rally began months earlier in 2023, reaching a 19-month high of around $41,000 in December. Analysts attribute this surge to several factors, including anticipation of SEC approval for spot ETFs, expectations of Federal Reserve rate cuts, and the upcoming halving event, which reduces the reward for mining bitcoin.

Despite its impressive rally, bitcoin remains highly volatile, as highlighted by Laila Maidan, investing correspondent at Insider. However, for crypto investors, bitcoin's resurgence brings welcome news after a turbulent 2022 marked by the collapse of exchanges like FTX. As the largest cryptocurrency by trading volume and most mined, bitcoin continues to serve as a barometer for the overall health of the crypto industry.