Bitcoin continues its record-breaking rally, reaching a new high above $71,000 on Monday. This unrelenting surge shows no signs of abating.

Adding fuel to the fire, Britain's financial watchdog, the FCA, announced it will allow recognized investment exchanges to launch crypto-backed exchange-traded notes (ETNs). This move signifies growing regulatory acceptance of digital assets.

Several factors are propelling Bitcoin's rise. First, a continuous influx of cash is pouring into new spot Bitcoin ETFs, reflecting growing institutional interest. Second, hopes of an interest rate cut by the Federal Reserve are also contributing to the positive sentiment.

Despite a slight slowdown in capital flow into major Bitcoin ETFs, investment remains strong, exceeding $1.8 billion in the week leading up to March 8th.

Analysts believe this week's surge is likely driven by a combination of factors. Crypto strategist Nick Cawley points to Bitcoin's inherent scarcity, with its supply limited to 21 million coins. The upcoming "halving" event in April, which will further reduce the rate at which new Bitcoins are released, is expected to bolster the price. Additionally, the potential acceptance of Bitcoin and Ethereum ETNs by the London Stock Exchange (LSE) might be contributing to the current momentum.

However, the FCA emphasizes that these ETNs are intended solely for professional investors, excluding retail participation due to potential risks.

Despite this caution, overall demand for Bitcoin is undeniably on the rise. Asset managers are now holding the largest bullish position in Bitcoin futures on record, highlighting growing institutional confidence. This bullish sentiment surpasses their holdings in traditional assets like the Sterling and even outweighs their bearish position on the Japanese Yen.

With regulatory tailwinds and surging institutional interest, Bitcoin's future trajectory remains intriguing. The rise of Ethereum is another noteworthy trend, with its price nearing a two-year high, fueled by speculation of potential spot Ether ETF approvals in the US this year.