Bitcoin notched its largest monthly gain in more than three years in February, climbing a whopping 48% to $63,000.

Thats the highest monthly gain since December 2020, TradingView data shows.

Market watchers bet that this is just the beginning.

The approval of spot Bitcoin exchange-traded funds in the US has driven the rally, according to Matt Hougan, chief investment officer at Bitcoin ETF issuer Bitwise Asset Management.

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Not only are retail investors putting more money directly into Bitcoin, but spot Bitcoin ETFs have also enabled them, and institutional investors to move into the space, he said during CNBCs Squawk Box segment on Thursday.

Until these ETFs were approved there was only a small set of investors who could access Bitcoin, Hougan said, now the supply-demand dynamic is just off the hook, he explained.

But this is just the start, Hougan said.

Theres an even bigger wave coming in a few months as we start to see the major wirehouses turn on, Hougan said.

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Wirehouses refer to large brokerage firms that offer financial services, including investment advice, portfolio management, and trading.

He is not alone in saying that.

Earlier this week, Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, said pressure is mounting on big US investment firms to tap into spot Bitcoin ETFs.

Morgan Stanley, UBS, and Merrill Lynch are currently mulling over whether or not to add spot Bitcoin ETFs, Balchunas said.

Bank of Americas Merrill Lynch and Wells Fargo are already adding spot Bitcoin ETFs to their brokerage platforms for some of their wealth management clients, Bloomberg reported Thursday.

There are other signs of increased institutional involvement in the market.

For instance, the share of Bitcoin trading on the weekend has declined since 2018, meaning more of the trading is taking place on weekdays, according to research firm Kaiko.

BTC weekend volume is in decline BTC weekend volume has largely declined since 2018. (Tyler Pearson/Kaiko)

The share of Bitcoin traded on weekends has declined significantly over the past six years, dropping to 17% last year from 24% in 2018, the firm said in a report on Monday.

Kaiko said that part of the reason for the growing gap is because trading has aligned with traditional finance players, most of which operate from Monday to Friday with limited after-hours trading.

The spot Bitcoin ETF buzz, combined with the upcoming halving event and macroeconomic conditions are expected to drive the price higher.

Bitcoins halving event happens automatically roughly every four years. It marks a change in the amount of new Bitcoin that can be created every day.

Miners will get 3.125 Bitcoin for creating new blocks after the halving, down from 6.25 currently. This causes a reduction in new supply hitting the market.

Thomas Lee, managing partner and head of research at research firm Fundstrat Global Advisors, has previously predicted that Bitcoin will surge to $150,000 in 2024.

He also said it could potentially reach as high as $500,000 over the next five years

Slightly more cautiously, analysts at research firm Bernstein have estimated that Bitcoin could rush past the $150,000 mark by mid-2025.

Skybridge Capital founder Anthony Scaramucci, on the other hand, has said that the worlds leading cryptocurrency could bag a $170,000 price tag in the next year and a half.

Eric Johansson is DL News news editor. Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact them at eric@dlnews.com and sebastian@dlnews.com.

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Bitcoin clocks best month in three years: 'There's an even bigger wave coming' - DLNews