The world’s largest cryptocurrency hit a high of $69,202, topping November 2021’s all-time peak of $68,999.99. Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January. It then traded lower and was last at $67,266.
“The bitcoin all-time high marks a turning point for crypto,” said Nathan McCauley, CEO and co-founder of crypto platform Anchorage Digital. “Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market.”
Bitcoin’s meteoric nearly 160% ascent since October, of which 44% came in February alone, marks a sharp contrast to 2022, when the market was beaten into an 18-month-long crypto winter, plagued by a string of high-profile corporate bankruptcies and scandals.
Net flows into the 10 largest U.S. spot bitcoin funds reached $2.17 billion in the week to March 1, with more than half of that going into BlackRock’s iShares Bitcoin Trust, according to LSEG data.
In addition to demand from a wider pool of investors, bitcoin, and crypto generally, have gotten a boost from the prospect of the Federal Reserve cutting U.S. interest rates, which often prompts investors to divert capital into assets that are higher-yielding or more volatile.
year at one cent shy of $69,000.
Bitcoin’s Rally
“One part of (bitcoin’s rally) has to do with the generally positive sentiment on risk in general,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. “You can see that in the all-time high in the S&P 500 and Nasdaq.”
Investors have lapped up crypto, mega-cap technology stocks, and investment-grade corporate bonds in particular this year.
Analysts say Bitcoin also benefited ahead of April’s so-called halving event – a process that takes place every four years in which the rate at which tokens are released is cut in half, along with the rewards given to miners.
Supply of bitcoin is limited to 21 million, of which 19 million have already been mined.
Despite its recent popularity, for many investors, bitcoin is simply too volatile and lacks enough real-world applications to be anything other than a speculative asset.
Yet, in addition to the cocktail of flows of money into ETFs, the prospect of constrained bitcoin supply, and an eventual decline in U.S. interest rates, some companies are adding crypto to their corporate coffers.
In February, software firm MicroStrategy- a long-time holder of Bitcoin said it had recently bought about 3,000 more bitcoins for $155 million, while social media platform Reddit also said in a regulatory filing it had bought small amounts of Bitcoin and ether.
On Monday, the number of dollar-pegged stablecoins issued by Tether crossed $100 billion for the first time. Tether issues a stablecoin that is designed to maintain a constant value of $1 and is widely used as a way of moving money in cryptocurrency without being exposed to price swings in other tokens such as bitcoin and ether.