Bitcoin (BTC-USD) reached a record high on Tuesday, surpassing the 69,000 level, and although it stands now at around 67,568, Deutsche Bank Research analysts believe the cryptocurrency is set to pump even higher.

In a Future Payments Strategy report, Analyst Marion Laboure gives five reasons why her team believes Bitcoin (BTC-USD) reached that record and why it is expected to go even higher.

Reason 1 - Demand for Bitcoin ETFs -- (BTCW), (IBIT), (BRRR), (ARKB), (BTCO), (HODL), (FBTC), (BITB), etc. -- drove gains in Bitcoin (BTC-USD) prices. Since the Jan. 10 SEC approval of 11 new ETFs, almost $7.9B in funds have flowed into the new spot Bitcoin ETFs.

iShares Bitcoin Trust ETF (IBIT) has received over $9.2B in inflows. The Fidelity Wise Origin Bitcoin Fund ETF (FBTC) received almost $5.3B.

Reason 2 - More Bitcoin ETFs are expected to come.

“ProShares has revealed its plans to launch five additional cryptocurrency ETFs, including one that would provide twice the daily exposure to a Bitcoin-tracking index,” said Laboure. “It also intends to introduce inverse Bitcoin ETFs that offer returns inversely proportional to the movement of the underlying index, paying out up to double the decline.”

In addition, the cryptocurrency market is becoming more institutionalized as traditional financial institutions are entering the crypto world and helping it become a more established asset class, she said.

Reason 3 - Bitcoin (BTC-USD) will under a halving in April 2024, which happens about every four years. “With each halving, the reward to mining [bitcoins] is decreased to maintain scarcity and control the cryptocurrency’s inflation rate over time,” explained Laboure.

The last one took place in May 2020. It reduced the miner reward from 12.5 to 6.25 bitcoins per block. This caused miners to see their profits reduced overnight. This half would reduce the reward once again to 3.125 bitcoins.

However, a price increase usually happens 30 days prior to the halving. Prior to the halving of November 2012, prices rose by 5%; prior to the halving of July 16, prices rose 13%; and more substantially, prices rose 27% prior to halving on May 2020.

Reason 4 - The strong performance of the U.S. economy, and the anticipation of interest rate cuts, has significantly eased financial conditions in the first quarter of the year, supporting great rallies in risk assets.

Market liquidity is also expected as central banks start to cut rates, and investors could seek out higher-yielding alternative assets as treasury returns (US10Y), (US5Y) decline.

“This flow of capital into non-traditional investment classes like cryptocurrencies could further support an ongoing rally in digital currency prices,” Laboure said.

Reason 5 - cryptocurrency regulation, which is expected in the upcoming future, could offer a clearer framework that would attract investors.

“We view regulation as a net positive development for the industry,” Laboure said. “A clearer regulatory framework is expected to drive increased corporate adoption and higher liquidity (resulting in less concentration), and, ultimately, help address volatility. These factors, in turn, should contribute to an increase in Bitcoin prices.”