Bitcoin has soared to a record high, fuelled by investors pouring money into US spot exchange-traded crypto products and the prospect that global interest rates may fall..

The world’s largest cryptocurrency hit a high of $US69,202 ($106,267) on Tuesday, topping November 2021’s all-time peak of $US68,999.99 ($105,956.59). Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January. It then reversed course and was recently down around 8.0 per cent at $US62,000 ($95,207).

“The bitcoin all-time high marks a turning point for crypto,” said Nathan McCauley, CEO and co-founder of crypto platform Anchorage Digital.

“Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market.”

The cryptocurrency’s latest meteoric rally may have more legs than in 2021 as more institutional investors commit long-term money that could help the token sustain its high levels this time, some experts believe.

Bitcoin’s nearly 160 per cent ascent since October, of which 44 per cent came in February alone, marks a sharp contrast to 2022, when the market was beaten into an 18-month long crypto winter, plagued by a string of high-profile corporate bankruptcies and scandal.

Net flows into the 10 largest US spot bitcoin funds reached $US2.2 billion ($3.4 billion) in the week ended March 1, with more than $US2 billion ($3.1 billion) of that going into BlackRock’s iShares Bitcoin Trust , according to LSEG data.

“We’ve been fielding more questions from the field on bitcoin, especially now that there are more efficient and cheaper ways to own bitcoin after the recent slew of ETF launches,” said David Wagner, a portfolio manager at Aptus Capital Advisors.

In addition to demand from a wider pool of investors, bitcoin, and crypto generally, has gotten a boost from the prospect of the Federal Reserve cutting US interest rates, which often prompts investors to divert capital into assets that are higher yielding or more volatile.

“One part of (bitcoin’s rally) has to do with the generally positive sentiment on risk in general,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. “You can see that in the all-time high in the S&P 500 and Nasdaq.”

Investors have lapped up crypto, mega-cap technology stocks and investment-grade corporate bonds in particular this year.

Also on Tuesday, gold struck a record high, moving further above $US2,100 ($3,225) per ounce in a rally sparked by growing bets for a US interest rate cut in June.

“(Cryptocurrencies) are now being used as an alternative to using gold when markets are looking to hedging against increased risks, higher interest rates,” said Stuart Cole, chief economist at Equiti Capital. “So no surprise I think that when you see the gold price rallying, cryptos are doing the same.”

Analysts say bitcoin also benefited ahead of April’s so-called halving event – a process that takes place every four years in which the rate at which tokens are released is cut in half, along with the rewards given to miners.

Supply of bitcoin is limited to 21 million, of which 19 million have already been mined.

Despite its recent popularity, for many investors, bitcoin is simply too volatile and lacks enough real-world applications to be anything other than a speculative asset.

Yet, in addition to the cocktail of flows of money into ETFs, the prospect of constrained bitcoin supply and an eventual decline in US interest rates, some companies are adding crypto to their corporate coffers.