In case you hadn’t heard (or choose to ignore such things), bitcoin is back. The original — and still biggest — cryptocurrency surged to a record high of more than $72,000 on Monday, having more than tripled in value in the space of a year. Other crypto tokens, such as ethereum and dogecoin — beloved by Elon Musk — have also been rallying, with the estimated value of the market climbing to above $2.7tn for the first time in more than two years. The funny thing is, though, that there’s a chance you have actually not heard. There’s not so much talk about which token is next going “to da moon” or so many instances of “Wen Lambo?” this time around. Newspapers aren’t running stories about how hilariously rich everyone is getting apart from you. Worldwide search traffic for “bitcoin” and “crypto” has climbed in recent days but it is still only about half the level it was the last time a record was hit in 2021, according to Google Trends.
No, crypto in 2024 (so far, at least) is a rather more subdued affair. And the reason is that the factors reckoned to be driving rising prices are far from the kind of wild crazes we’ve seen before, such as the mania for initial coin offerings in 2017 or for non-fungible tokens in 2021.
Instead, there are some rather more prosaic things going on. These are: supply and demand dynamics in the lead-up to the “halving” expected in April, when the number of new bitcoins mined every 10 minutes halves to 3.125; the prospect of lower interest rates; and institutional capital flows into the 11 bitcoin-based exchange traded funds approved by the US Securities and Exchange Commission this year.