The price of bitcoin (BTC) surged again Tuesday to cross $69,000, an all-time high. The largest cryptocurrency by market cap has now risen more than 61% year-to-date and has tripled in the past year alone.

What’s Driving the Bitcoin Rally?

In January, the SEC approved 11 bitcoin spot ETFs, paving the way for mainstream users to easily invest in the cryptocurrency. And that move has not only driven investor optimism but also money into the new funds. BlackRock’s spot bitcoin ETF (IBIT) became the fastest fund to reach $10 billion this week, Bloomberg reported. 

That move, paired with high demand and limited supply as well as the upcoming halving, helped prompt this year’s price surge, according to crypto enthusiasts. 

Dirk de Bruin of Intelligent Cryptocurrency, a research firm, called spot bitcoin ETFs a “gamechanger.”

“It now finally allows everyone to get exposure to BTC in a safe and compliant way,” de Bruin said in an email to Investopedia. “Before the ETFs this was very difficult to do, there was doubt about compliance and safety, many individuals and funds didn’t want to deal with exchanges and having to hold their own coins etc.”

The ETFs actually have to hold bitcoin, and because bitcoin supply is capped at 21 million and more than 19.6 million are already in circulation, the demand is pushing the price higher, de Bruin said.  

Brett Munster, a portfolio manager at Blockforce Capital, said the amount of bitcoin sitting on exchanges is at its lowest point since 2017, and there’s a tendency for investors to hold onto their bitcoin for the long term. 

“What we are seeing is the liquid supply of bitcoin continuing to shrink at the same time capital inflows are growing,” Munster said in an email to Investopedia. “Assuming these conditions continue to hold, we expect there to be continued upward pressure on bitcoin’s price throughout the year.”

The halving in April—when the reward miners get for mining gets cut in half to ensure bitcoin’s scarcity—is likely to further intensify this supply squeeze, Munster said.  

Crypto researcher Noelle Acheson said until this week, the rally was largely driven by growing awareness, onramps like the ETFs, and understanding that central banks are simply printing money to finance government debt.

Can This Momentum Sustain?

The factors driving the rally are varied, and there is no end to predictions, with Ark Invest CEO Cathie Wood calling for the cryptocurrency to hit $1.5 million by 2030 and Fundstrat’s Tom Lee forecasting $82,000 in the near term and $150,000 before the end of the year. 

But some analysts are wary of the exuberance around the price expectations.

“It is starting to feel speculative, as traders and investors get ahead of what they see as momentum,” Acheson said in a message to Investopedia. “There is for sure still strong ‘fundamental’ inflows, by which I mean buyers who want a longer-term allocation for diversification. But there is also some froth from expectation that the all-time high is about to be breached, propelling the BTC price to higher highs based on momentum coupled with a diminishing readily available supply.” 

Others believe that the very reason for the rally—the ETF approval—could result in price volatility.

“On January 11, the date on which all 11 ETFs launched, bitcoin’s volatility began to increase for the first time in more than 16 months,” David Puell, an analyst at Ark Investments, wrote in a commentary Monday. “Prior to the first quarter, bitcoin’s quarterly volatility had been falling relative to its annual volatility for more than a year,” they wrote.

For skeptics, nothing has changed and the approval of ETFs is not a major marker of approval.

“The approval of the ETFs is being taken as an endorsement of bitcoin and its viability or safety, when that’s really not what it was,” said Molly White, a software engineer and crypto skeptic. “It has provided probably more trust as an asset class that is probably not deserved.”

There has been very little actual change in regulation and legislation when it comes to the status of cryptocurrency, White said in a phone interview. “The markets are still the Wild West.”