Bitcoin blew past $60,000 for the primary time in greater than two years on Wednesday as the recognition of spot ETFs drove a renewed trading frenzy for volatile cryptocurrencies — and crashed popular crypto exchange Coinbase.
The worth of bitcoin soared to just about $64,000 within the early afternoon, nearing it’s all-time high of $$68,789 in November 2021, before falling to around $61,000 by 6 p.m. That marked an 18% increase within the leading digital currency in comparison with one week ago and 40% bump in comparison with a month ago.
Within the midst of Wednesday’s rally, Coinbase, one in every of the most important digital asset exchanges, warned users that its website was experiencing issues – but assured customers that their “assets are secure” after several complained that their digital wallets showed “$0.00.”
The Federal Reserve delivering a series of rate cuts this 12 months has fed investor appetite for higher-yielding or more volatile assets. AP
“We’re coping with a big surge of traffic — apologies for any issues you encounter,” Coinbase CEO Brian Armstrong posted on X.
The bullish run on the world’s hottest crypto token could possibly be the beginning of what Split Capital’s Zaheer Ebtikar called “a fairly clear FOMO type of rally.”
“Increasingly individuals are just convinced to purchase,” Ebkitar told Bloomberg.
The large early success of recently approved spot bitcoin ETFs — which permit investors to accumulate stakes in funds that own bitcoin offered by Blackrock, Fidelity and other firms – has played a key role within the surge, experts told The Post.
The boom drove $520 million into BlackRock’s Bitcoin ETF, a one-day record.
“I do think the actual fact this is occurring concurrent with the ETFs – and you’ll be able to have a look at the inflows of those things – that appears to be a fairly large driver for this [rally],” said Colin Harper, head of research on the bitcoin mining software firm Luxor.
“There’s a big segment of the population that sees regulatory approval as, ‘well, the state’s okay with this, they’re not going to ban it, institutions are cleared now.’… “There’s loads more legitimacy to it for the typical person,” Harper added.
The three hottest, run by Grayscale, Fidelity and BlackRock, have seen trading volumes surge. Getty Images
Nevertheless, other market experts warned that investors may soon see a “sharp correction” of 20% or more.
“This move has been very sharp, leverage could be very high for the time being,” AnB Investments’ Jaime Baeza Baeza told Bloomberg.
The general market capitalization for the cryptocurrency market hovered at a whopping $2.31 trillion as of Wednesday afternoon – after crossing the $2 trillion threshold earlier this month for the primary time in two years.
Cryptocurrencies have re-emerged as a hot asset alongside other trendy bets resembling AI chipmaker Nvidia and weight-loss drug maker Eli Lilly, based on Jake Dollarhide, CEO of Longbow Asset Management.
It’s also driven a wave of FOMO, or “fear of missing out” activity as retail investors scramble to purchase into the trend.
“You might have the extra momentum of it being legitimatized by the SEC approving the ETFs from Blackrock and others. After which, frankly, the trash was hauled off to the curb in the shape of Binance and FTX,” Dollarhide said. “You do away with some bad actors and also you rebuild trust throughout the crypto space.”
LSEG data showed flows into the ten largest spot bitcoin ETFs brought in $420 million on Tuesday alone, probably the most in almost two weeks. REUTERS
The most recent rally in bitcoin’s price brought it inside striking distance of its all-time high of $69,000 – a number that seemed unattainable over the past two years as a so-called “crypto winter” crushed demand for cryptocurrencies.
Bitcoin’s struggles throughout 2021 and 2022 were compounded by a variety of scandals, including the collapse of convicted crypto fraudster Sam Bankman-Fried’s FTX empire.
We’re coping with a LARGE surge of traffic – apologies for any issues you encounter. The team is working to remediate.
— Brian Armstrong 🛡️ (@brian_armstrong) February 28, 2024
Other bullish aspects include investor optimism that the Federal Reserve will cut sky-high rates of interest in some unspecified time in the future this 12 months in addition to a looming bitcoin “halving”– a pre-planned event due in April that reduces the quantity of digital currency people receive for “mining” by half.
Bitcoin’s “halvings” are supposed to make sure the currency’s scarcity over time. While the precise impact of every halving on bitcoin’s value is up for debate amongst experts, the value of bitcoin has soared ahead of past halvings that occurred in 2020, 2016 and 2012.
“Because the halving approaches, supply of recent coins can be cut in half while demand is buoyed by the ETFs,” said Christopher Alexander, chief analytics officer at Pioneer Development Group.
“Once the small retail investors fully regain confidence in crypto exchanges there can be demand pressure at a level that has never been seen before,” Alexander added.
With Post wires