Bitcoin nears record high as investors flock to crypto funds
The world’s biggest cryptocurrency, bitcoin, has risen above $60,000 for the first time since 2021, as a wave of new investors boosted by the launch of regulated exchange traded funds (ETFs) fuelled a surge in demand.
Bitcoin gained 7.4 per cent to reach $61,120 on Wednesday, up 43 per cent since the start of the year and close to its all-time high of nearly $69,000 in November 2021.
The rally has been driven by the approval of spot bitcoin ETFs by US regulators in January, which opened the door for mainstream asset managers such as BlackRock and Invesco to offer crypto exposure to their clients. The 11 bitcoin funds now hold 303,000 bitcoins, worth $18 billion and representing 1.5 per cent of the total supply, according to K33 Research.
Simon Peters, an analyst at eToro, said the funds were “without a doubt” the main force behind the price rise and predicted that the record high could be broken “any day now”.
Timo Lehes, co-founder of blockchain company Swarm, said the rapid increase in value had triggered a “fear of missing out” among investors who wanted to join the crypto boom. “This is insane,” he said.
The soaring price of bitcoin comes amid a broader rally in traditional markets, as strong earnings from chipmaker Nvidia and other tech companies lifted US and European stocks to record levels this week.
Bitcoin leads the way as crypto rebounds
After a period of volatility and uncertainty, the cryptocurrency market is showing signs of recovery and resilience. Bitcoin, the most dominant and influential digital asset, has regained its momentum and is approaching new highs. The positive trend is driven by various factors, such as institutional adoption, regulatory clarity, and technological innovation. As the world embraces the potential of blockchain and decentralized finance, all eyes are on Bitcoin as the pioneer and catalyst of the crypto revolution.
However, bitcoin still faces regulatory hurdles and scepticism from some authorities and analysts. Last week, European Central Bank officials said the cryptocurrency had “zero” fair value and warned of the social and environmental costs of a renewed boom-bust cycle.
The crypto industry has also been hit by scandals and legal troubles in recent years. Binance, the largest crypto exchange, was fined $4.3 billion by the Securities and Exchange Commission in November for violating anti-money laundering and sanctions rules.
FTX, another leading exchange, collapsed in 2022 and its founder Sam Bankman-Fried was convicted of fraud and money laundering. His lawyers are seeking a lenient sentence of a few years in prison, instead of the 100-year term he faces.
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