The price of Bitcoin exceeds $69,000, reaching a record high

Unlock the Publisher’s Digest for free

Bitcoin traded at $69,200 on Tuesday, marking a new all-time high for the world’s largest cryptocurrency.

The price has risen since U.S. regulators in January approved a series of bitcoin exchange-traded funds issued by Wall Street stalwarts, including Fidelity and BlackRock, the world’s largest asset manager.

The new wave of capital has resulted in a gain of more than 60% for bitcoin since the beginning of the year and has helped push the flagship crypto token into uncharted territory, surpassing the record set in November 2021. Shortly after hitting the milestone, bitcoin fell 4.7% to $64,300.

More than $7.5 billion in capital has flowed into newly approved bitcoin ETFs since their first day of trading on Jan. 11, according to cryptocurrency investment group CoinShares.

“The excitement and hype around ETFs ended up being way beyond anyone’s expectations,” said Jad Comair, founder of digital asset investor Melanion Capital. Spot bitcoin ETFs offer investors the ability to gain direct exposure to cryptocurrency without the risks associated with largely unregulated cryptocurrency exchanges.

Bitcoin’s latest record marks a watershed moment for the cryptocurrency, which traded as low as $16,000 amid a major market crisis in 2022 and was often dismissed by skeptics as a burst bubble that would not recover after the crash of high-profile crypto companies, including FTX.

Histogram of average bitcoin liquidity on centralized exchanges (BTC) shows that bitcoin liquidity on crypto exchanges fails to catch up despite record price

“It’s not just a spectacular increase in price, it’s also a paradigm shift for bitcoin. Today, investors investing in bitcoin will be five or ten times more confident than they would have been just a couple of years ago,” Comair said.

“We have to ask ourselves whether we are missing something big or not,” said Luca Paolini, chief strategist at Pictet Asset Management. “The environment we’re in now is very different than it was a couple of years ago, when we were clearly in bubble territory.”

The token’s price is also driven by a rapidly approaching update to the bitcoin network – called the bitcoin halving – scheduled for next month, which will slow the circulation of available coins. Bitcoin bulls expect this to continue fueling the cryptocurrency’s bullish momentum.

The rally, which set a dramatic pace even by Bitcoin standards, prompted comparisons to 2021, when Bitcoin set its previous records following a wave of retail enthusiasm.

“The current scenario seems similar to the exuberant one in 2021, when retail investors were driving both the cryptocurrency and stock markets simultaneously,” said JPMorgan analyst Nikolaos Panigirtzoglou, who warned there was a “high risk of profit taking” in sight. of next month’s bitcoin halving event.

But despite bitcoin’s latest surge, liquidity has yet to return for the cryptocurrency industry’s best-known token. According to numbers shared by data provider CCData, liquidity on the 21 major centralized exchanges is still well below levels seen this time last year.

Video: Bitcoin mines could be used for energy storage | FT Tech

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *