On Tuesday, Bitcoin reached a new zenith, setting a record at $69,202, surpassing its previous high from November 2021.
This surge is attributed to a significant influx of investments into U.S. spot exchange-traded crypto products and the anticipation of global interest rate reductions.
Following the Securities and Exchange Commission’s approval of 11 spot bitcoin ETFs in late January, investor enthusiasm has markedly increased, with Bitcoin’s price briefly dipping to $65,792 after reaching its peak.
Nathan McCauley, CEO of Anchorage Digital, emphasized the milestone, noting, “The bitcoin all-time high marks a turning point for crypto.
Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market.
“This rally, with Bitcoin soaring nearly 160% since October and 44% in February alone, starkly contrasts the 2022 “crypto winter” marred by corporate failures and scandals.
U.S. spot bitcoin funds, especially BlackRock’s iShares Bitcoin Trust, saw a $2.2 billion net inflow in the week ending March 1.
David Wagner of Aptus Capital Advisors highlighted the growing interest and accessibility in bitcoin investments post the recent ETF launches.
The Federal Reserve’s potential rate cuts have further buoyed bitcoin and crypto markets, driving capital towards more volatile assets.
Alvin Tan from RBC Capital Markets linked bitcoin’s rally to the broader risk appetite evident in record highs of major stock indices.
The year has seen a preference for cryptocurrencies, technology stocks, and corporate bonds.
Concurrently, gold’s value surged above $2,100 per ounce, attributed to expectations of a U.S. interest rate cut, with cryptocurrencies increasingly serving as alternative investment hedges.
Analysts also point to the upcoming bitcoin “halving” event, which reduces token release rates and mining rewards, as a positive influence.
Despite bitcoin’s volatility and speculative nature, the combined factors of ETF inflows, a finite supply, and potential rate cuts have bolstered its appeal, with companies like MicroStrategy and Reddit incorporating it into their assets.
In related news, the value of ether remains below its peak despite bitcoin’s gains, and crypto stocks experienced a downturn, with notable companies like Coinbase and Riot Platforms seeing declines in their share prices.