Cryptocurrencies are surging again. Bitcoin has just hit an all-time high of more than US$72,000 (£56,300), pushing past the level of circa US$69,000 where it turned back during its last bull phase in late 2021.

Other top cryptocurrencies like ethereum and solana have reached their highest prices in three years, on the back of a run that has been going since the autumn. The value of the whole cryptocurrency market has raced up to US$2.6 trillion, triple what it was worth at the beginning of 2023 and not far off its previous US$3 trillion peak.

Much of this run has occurred at a time when the US dollar has been strengthening against other currencies (though it has fallen in the past couple of weeks). This can often be a time when cryptocurrencies get weaker, so it shows how strong they have been lately.

Many other fiat currencies around the world have been losing value against the US dollar during this period, so bitcoin reached all-time highs in many of them long before it finally took out its high in the US currency.

So what has contributed to this explosion in prices and where is the market going for the rest of 2024?

Bitcoin ETFs

A major driver for this appreciation in prices has been the US authorities’ approval in January of an investment vehicle known as an exchange-traded fund or ETF for the general or “spot” bitcoin market. An ETF is an easy way for the average saver to get exposure to an asset, since they buy shares in the vehicle, usually through their financial advisor, rather than having to go to the trouble of buying the underlying asset.

A total of 11 bitcoin ETFs were approved in the US, and their daily trading volume has now exceeded US$10 billion – driven by frontrunners Blackrock and Fidelity Investments. This demonstrates the large interest from traditional market participants, and as the spot ETFs become more mature, their providers will offer more promotional material and education to get more customers onboard.

Bitcoin/US$ price