Bitcoin regains $1 trillion market cap as the cryptocurrency hits over two-year high

Bitcoin surged to another more than two-year high on Wednesday, pushing its market cap back over $1 trillion as growing success of U.S. spot bitcoin ETFs turned investor sentiment more positive.

The flagship cryptocurrency was last higher by 5% at $51,929.89, according to Coin Metrics. Earlier in the morning it rose to $52,079.00, its highest level since December 2021. Its market cap, or the value of all the bitcoin in circulation, rose above $1 trillion for the first time since late 2021, according to CoinMarketCap data.

Ether was last trading 5% higher at $2,758.65, after earlier touching a May 2022 high.

Bitcoin rallied 157% in 2023, as anticipation built for the U.S. Securities and Exchange Commission's approval of bitcoin exchange-traded funds — or ETFs — which eventually came in January this year.

The price of bitcoin dipped after the ETF approval. A new rally began in late January, as investors now look toward the "halving" — a supply-restricting event written in bitcoin's code that happens every four years and is slated for April.

When the halving takes place, the rewards given to bitcoin miners are cut in half, which reduces the volume of the cryptocurrency onto the market. Historically, halving has preceded bitcoin hitting new all-time highs in ensuing months.

Bitcoin's last record high was just under $69,000 in November 2021.

The latest leg of the rally appears to be fueled in part by high demand for the ETFs. The newly-issued spot bitcoin ETFs recorded net inflows of $1.1 billion last week.

ETFs are a product that track the price movement of another asset, in this case allowing investors to play bitcoin price moves without owning the underlying cryptocurrency. However, ETF issuers will need to buy and sell bitcoin to back the derivative.

Other cryptocurrencies have also observed price rises. Ether, the coin associated with Ethereum, hit $2,759.87 on Wednesday, according to CoinDesk data — its highest level since May 2022. Investors are hoping that an ether ETF may be approved by the SEC this year.