^{This article originally appeared on Business Insider.}

Bitcoin is in an extended retracement to levels seen recently when interest rates were close to zero and Pixel artwork regularly sold for millions.

On Monday, bitcoin rose more than 5% to pass $66,000 for the first time in nearly three years. It is within reach of an all-time high of $69,000. Ether, solana, dogecoin and other tokens are also holding rallies. In February, the market value of cryptocurrencies returned to $2 trillion for the first time since April 2022.

This retest of highs comes against the headwinds of interest rates potentially remaining higher for longer. Markets have pushed back their rate cut forecasts as inflation continues and the economy shows little sign of slowing.

Last time, the rally was fueled by low interest rates that encouraged speculative behavior. When the Federal Reserve began raising rates to reduce high inflation, the momentum ran out and Bitcoin fell to $16,000 less than a year after hitting records.

Now cryptocurrencies are rising at still elevated rates and without a clear path lower.

What gives?

“Although Fed rate cut expectations have been pushed back, the threat of a rate hike is off the table for now,” Blue Chip Daily chief technical officer Larry Tentarelli told Business Insider, adding, “So bitcoin was at the rally.”

There is also a supply-demand imbalance that seems to outweigh policy concerns.

A series of bitcoin-ETF approvals has fueled demand and retail interest as markets prepare for the bitcoin halving event that will lower the reward for miners and halve the volume released each day.

The halving occurs once every four years, with occurrences in 2020, 2016 and 2012. In the 12 months following the previous three halvings, bitcoin rose by 8,069%, 284% and 559%. The event puts pressure on supply as it slows the rate at which new bitcoins enter the market, and this year's halving will come at a time when demand is rising sharply.

Tentarelli and other market professionals have pointed to the emergence of bitcoin ETFs as a “tremendous” driver of crypto demand, as the products allow more investors to gain exposure without buying full tokens.

CoinShares data released on Monday shows that last week digital investment products saw the second-biggest weekly inflows on record, at $1.84 billion. Ninety-four percent of those entries moved to bitcoin products. Trading volumes in investment products reached a record of more than $30 billion in the same stretch.

ETFs from Wall Street titans like BlackRock and Fidelity invest directly in bitcoin and are increasingly taking up the available supply.

A report from CoinDesk in February, a month after the ETF approvals, said the 11 funds held 192,000 bitcoins. That figure is split from the 420,000 owned by Grayscale, which converted its bitcoin trust into an ETF, and the nearly 200,000 owned by MicroStrategy.

Standard Chartered has predicted that ETF inflows could help boost bitcoin's price to $200,000. Fundstrat's Tom Lee has an even better prediction, saying crypto could catch up 500,000 dollars.

“There's a limited supply and now we have a potentially huge increase in demand” with the spot Bitcoin ETF adoption, Lee said in a recent interview, “so I think in five years something around half a million would be potentially achievable.” .