Mint Explainer: What's caused bitcoin to surge past $50,000?

livemint.com:

Mint explains why bitcoin is surging again. The recent surge in bitcoin prices was driven by an estimated $1.1 billion flowing into ETFs during the past week — the highest weekly inflow since the launch of bitcoin spot ETFs. This inflow has seen ETFs collectively amass 200,000 bitcoins, pushing up the price of the digital asset, which has a limited supply and a cap on the number of new tokens added every day.

More funds are expected to flow into bitcoin spot ETFs in the coming weeks and months as it becomes a mainstream asset class in investors’ portfolios. While demand is rising, supply is set to be further restricted in about two months. The creators of bitcoin designed the cryptocurrency to have an upper limit of 21 million coins, which they felt would create a scarcity and thus push up its value.

So far, a little over 19.6 million have been ‘mined’, and 900 bitcoins are currently added every day. A new block is added to the chain once about every 10 minutes, and crypto miners are rewarded with 6.25 bitcoins at present for every block they create. Bitcoin’s inventors designed this reward to halve every time 210,000 blocks are added to the chain, which usually happens every four years.

This next halving of rewards is expected to take place in April-May, so miners will receive only 3.125 bitcoin per block until the next halving. As the halving of bitcoin rewards slows the increase of the cryptocurrency’s supply, its price usually starts to rise well in advance, and soars after the halving. For instance, in the 12 months after the most recent halving in 2020, bitcoin gained about 560%.