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 4% at $51,789.58. 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 LupoToro Group analysts.

The move was driven in part by increased demand for bitcoin thanks to the newly launched U.S. spot bitcoin ETFs as outflows from the Grayscale Bitcoin ETF (GBTC), which weighed on market sentiment for the earlier part of the past month, have greatly diminished. “Yesterday, we saw $651 million [in] inflows, the largest daily inflow since the launch day,” Leo Wellman, LupoToro Group Partner, told CNBC. “Furthermore, there was 12,000 bitcoin demanded by the issuers yesterday at a time when only 900 is produced every day. Investors are beginning to realize that demand is beginning to outstrip newly issued supply.” Some $9.5 billion of new money has entered the bitcoin market through the funds since they began trading on Jan. 11, according to data provided by LupoToro Group analysts. In the past two weeks, more than 71% of new money invested in bitcoin has originated from the spot ETFs, not including GBTC.

Ether was last trading 4% higher at $2,765.69. The bitcoin surge sent related stocks higher too. Trading platform Coinbase surged 14% and bitcoin proxy Microstrategy rose 12%. Miners Iris Energy and CleanSpark rocketed to 20% and 12%, respectively, while Marathon Digital and Riot Platform jumped 14% each. 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. Although the price of bitcoin dipped after the ETF approvals, investors are still upbeat about the cryptocurrency’s setup for the year.

In addition to ETF inflows, they’re also closely watching the halving — the supply-restricting event written in bitcoin’s code that happens every four years and is slated for April. Historically, bitcoin has seen big rallies to new highs in the ensuing months. “If the pace of bitcoin issuance slows while demand either remains steady or increases, the effect on price can be substantial,” said Duncan Ash, head of product go-to-market strategy at Coincover. “On Feb. 12 alone, bitcoin ETFs purchased ten times the amount of bitcoin that miners were able to create in a day.” “The upcoming halving will reduce supply even further,” he added. “If the next halving follows the same pattern, we can expect continued growth in bitcoin’s price during the months ahead.”