The largest cryptocurrency has jumped more than 45% already this year, fueled in part by the successful launch of US exchange-traded funds holding the coins that have attracted more than $6 billion since they began trading Jan. 11. Bitcoin last traded at $60,000 in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

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An upcoming reduction in Bitcoin’s supply growth, known as the halving, is adding to the optimistic sentiment. That has helped to extend a prolonged rally that has also stoked speculative appetite for smaller tokens ranging from Ether to Dogecoin.

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“We are starting to see a pretty clear FOMO kind of rally,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “More and more people are just convinced to buy.”

The intense rally has Bitcoin on pace for its biggest monthly gain since December 2020, when the digital token jumped 50% to around $9,600.

Bitcoin has more than tripled in value since the start of last year, climbing back from a 64% plunge in 2022, in a remarkable comeback from a series of crypto-industry scandals and bankruptcies that had raised questions about the viability of digital assets. The digital asset rose as much as 10% to $62,539 on Wednesday, the largest intraday increase since Oct. 24.

Digital tokens are jumping even though investors have pared back expectations for looser monetary policy this year, evidenced by a rise in US Treasury yields. Bitcoin has outperformed traditional assets like stocks and gold in 2024.

“This reversal is all the more impressive in the light of central banks signaling they intend to keep rates high a while longer, eroding the theory that the next crypto bull would be driven by dropping interest rates,” said Michael Safai, co-founder at quantitative trading firm Dexterity Capital.

The massive inflows into Bitcoin ETFs have prompted some industry watchers to warn of a looming supply squeeze as new coins from miners can’t keep up with demand. Some 80% of Bitcoin’s supply hasn’t changed hands in the past six months, potentially exacerbating the squeeze and adding to the upward price pressure, analysts have said.

The nine new spot ETFs have more than 300,000 Bitcoin, or seven times the amount of new coins mined since Jan. 11. After the halving, expected in late April, the number of new coins mined daily will decline to 450 from 900 currently. If this demand stays constant, with supply of new coins cut in half, advocates are predicting that the price has room to rally.

“All of this combined makes for a supply and demand imbalance,” said Dan Slavin, founder of Chainview Capital, a crypto hedge fund. “More demand than supply means price higher, and with BTC price volatility, price higher doesn’t mean 10%, it means a whole lot more.”

The spreed of the rally has some observers warning that it leaves investors susceptible to the boom and bust cycles that have become emblematic of crypto.

“This move has been very sharp, leverage is very high at the moment, as implied by derivatives basis and funding rates, so I would not be surprised by a sharp correction” or 20% or more, said Jaime Baeza, founder at crypto hedge fund AnB Investments. “Nonetheless I would not be shorting into this rally while it continues to move at this pace.”