(CNN) — Last month, as Bitcoin approached $45,000, JPMorgan Chase CEO Jamie Dimon compared the cryptocurrency to a pet rock and said people should “stop talking about that thing.”
Now, Bitcoin investors are laughing out loud.
The cryptocurrency has surged a whopping 20% in just five days. And with Wednesday’s gains, it is approaching its all-time high of nearly $69,000 set in November 2021, the last time Bitcoin traded above $60,000.
The rally has been driven by billions of dollars inflows into the cryptocurrency after the U.S. Securities and Exchange Commission gave the green light to Bitcoin exchange-traded funds last month.
The other major factor in play is the upcoming Bitcoin “halving”. Halving refers to Bitcoin’s built-in feature that automatically reduces the rate at which new coins are put into circulation. This happens approximately every four years and, in theory, drives up the price of Bitcoin because it creates more scarcity of the already limited currency.
This happens because Bitcoin miners (who are behind the programs used to solve the complex mathematical problems underlying the coin’s use) see their Bitcoin-worth reward halved when a threshold is reached.
In the past, Bitcoin halvings have catalyzed significant bullish periods. But there is no hard and fast rule: the result is the same every time. Any number of events – such as the possibility of new regulations – could affect any potential profits arising from halving.
However, so far investors seem quite optimistic and are rushing to get into action or withdraw their profits. Crypto exchange platform Coinbase faced major disruptions as a result of the surge in trading, company CEO Brian Armstrong said in a post on Wednesday.
Apps are working fine now.
We modeled and load tested a ~10x increase in traffic. It exceeded that number.
Keeping services over-provisioned is expensive, but we need to keep working on auto-scaling solutions, and remove any remaining bottlenecks. Thanks for this… https://t.co/JXVppV57AF
-Brian Armstrong
(@brian_armstrong) 28 February 2024
“Some users may see zero balances in their Coinbase accounts and may experience errors when making purchases or sales,” Coinbase Support posted on X around 1 p.m. ET this Wednesday. “Our team is investigating this and will provide an update soon. “Your property is safe.”
An hour and a half later, Coinbase said in another post on X that it was “beginning to see an improvement in customer trading.” He said customers may still experience some issues “due to increased traffic.”
Coinbase declined to comment to CNN about the outage beyond X-Post.