Bitcoin was on course for its most significant monthly gain in over three years, nearing a record high, driven by an influx of cash into exchange-traded funds (ETFs). The approval and launch of spot bitcoin ETFs in the U.S. this year have attracted new investors, rekindling enthusiasm that waned during the crypto market downturn in 2022.

The largest cryptocurrency, Bitcoin, was up 3.4% at $62,205, reaching $63,933 overnight, the highest since late 2021. Its monthly gain exceeds 47%, the largest since December 2020. This rally has also lifted Ether, with the smaller cryptocurrency surpassing $3,500 for the first time since April 2022 and recording a 52% increase in February.

Analysts suggest that Bitcoin’s momentum indicates a potential test and breakthrough of $69,000, surpassing its previous record high from November 2021. The surge in bitcoin activity has led to a surge in traffic on Coinbase (NASDAQ:COIN), and around $612 million flowed into the ten largest spot bitcoin ETFs on Wednesday, with BlackRock (NYSE:BLK)’s iShares bitcoin trust receiving the most significant share.

Traders are also positioning themselves in bitcoin ahead of the halving event scheduled for April, a process that occurs every four years, reducing the rate at which new tokens are released. Additionally, the prospect of the U.S. Federal Reserve implementing interest rate cuts this year, combined with lower yields on bonds, has heightened investor appetite for riskier assets, including bitcoin.

Standard Chartered (OTC:SCBFF)’s Geoff Kendrick emphasized the significance of interest rate cuts, stating, “If you can get higher returns elsewhere, Treasury yields are higher, then you’re comparing that against what you can earn from bitcoin.” He also highlighted the importance of the U.S. economy’s health and the substantial inflows into bitcoin funds.