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Bitcoin hits new all-time high as traditional money flows into cryptocurrencies
Ozan Kose/AFP/Getty Images
Bitcoin, which accounts for more than half of all cryptocurrencies in circulation, has grown more than 200% in the last 12 months.
CNN New York –
Bitcoin rose to an all-time high on Tuesday, shaking off a more than two-year rut that had called into question the future of the entire crypto ecosystem.
Bitcoin, the world’s oldest digital currency – and by far the largest – traded above $69,000 on Tuesday morning, surpassing the previous record of $68,789 set on Nov. 10, 2021, according to CoinMarketCap.
In the last months, the bitcoin rally was boosted by U.S. regulators’ approval of ETFs pegged to the digital asset, which created an on-ramp for more traditional investors to incorporate bitcoin into their portfolios.
That approval required years of lobbying by crypto firms and was only grudgingly granted by the Securities and Exchange Commission after a court ruled that the regulator’s reasons for rejecting bitcoin ETF applications were “arbitrary and capricious.”
The first 11 bitcoin spot ETFs, which track the real-time market price of the asset, launched in January.
After just one month, the data showed, ETFs had spurred more than $4.2 billion in net new flows Bloomberg.
ETFs are investment instruments that track a basket of assets but trade like a stock. Part of the appeal of a bitcoin ETF is that investors can get exposure to bitcoin through their usual brokerage firm, instead of having to set up a digital wallet through a cryptocurrency exchange.
Bitcoin is a proxy for the broader $2 trillion cryptocurrency industry, whose reputation has been put to the test by a series of headline-grabbing negative events: high-profile failures of stock exchanges and lenders, volatile swings in prices e trial of Sam Bankman-Frieda former crypto industry celebrity who was convicted in November of stealing billions of dollars from customers of his FTX exchange, which collapsed in late 2022.
“To fully appreciate this new record, we must recognize the cascade of events that rocked the cryptocurrency market in 2022 and 2023 and marvel at Bitcoin’s ability to perpetually bounce back from adversity,” said Antoni Trenchev, co-founder of Crypto. lender Nexo Capital, in a statement Tuesday.
According to CoinMarketCap, Bitcoin, which accounts for more than half of all cryptocurrencies in circulation, has grown more than 200% in the last 12 months.
Bitcoin’s rally has also been fueled by cryptocurrency faithful, who expect further gains this spring following an event known as “halving”. Approximately every four years, the number of bitcoins entering circulation is halved – a built-in feature of the cryptocurrency, which is limited by nature. As bitcoin approaches scarcity, the value is expected to increase.
The timing of bitcoin’s new record is noteworthy, Trenchev said, because the asset usually hits a new high after the halving. But the ETF’s rise accelerated the rally.
“This could mean we are facing an earlier, sharper and shorter bull cycle, followed by a painful and prolonged crash,” he said.