News
Bitcoin hits new high as traditional money flows into crypto
Ozan Kose/AFP/Getty Images
Bitcoin, which represents more than half of all cryptocurrencies in circulation, is up more than 200% in the past 12 months.
CNN New York —
Bitcoin hit an all-time high on Tuesday, ending a more than two-year rut that had called into question the future of the entire crypto ecosystem.
Bitcoin, the world’s oldest – and by far the largest – digital currency, traded above $69,000 on Tuesday morning, surpassing the previous high of $68,789 reached on November 10, 2021, according to CoinMarketCap.
Over the past few months, the bitcoin rally was boosted by U.S. regulators’ approval of exchange-traded funds linked to the digital asset, which created an on-ramp for more traditional investors to incorporate bitcoin into their portfolios.
This approval required years of lobbying by crypto companies and was only reluctantly granted by the Securities and Exchange Commission after a court ruled that the reasons given by the regulator for rejecting applications for Bitcoin ETFs were “arbitrary and capricious”.
The first 11 “spot” Bitcoin ETFs – which track the real-time market price of the asset – were launched in January.
After just one month, ETFs had generated more than $4.2 billion in net new flows, according to Bloomberg.
ETFs are investment tools that track a basket of assets but trade like a stock. Part of the appeal of a Bitcoin ETF is that investors can gain exposure to Bitcoin through their regular brokerage firm, rather than having to create a digital wallet through a cryptocurrency exchange.
Bitcoin is a bellwether of the broader $2 trillion crypto industry, whose reputation has been dented by a series of headline-grabbing negative events: high-profile exchange bankruptcies and lenders, volatile price fluctuations and prosecution of Sam Bankman-Frieda former crypto celebrity who was convicted in November of stealing billions of dollars from customers on his FTX exchange, which collapsed in late 2022.
“To fully appreciate this new record, we must recognize the cascade of events that have shaken the crypto market in 2022 and 2023 and marvel at bitcoin’s ability to continually bounce back in the face of adversity,” said Antoni Trenchev , co-founder of crypto. lender Nexo Capital, in a statement Tuesday.
Bitcoin, which represents more than half of all cryptos in circulation, is up more than 200% in the past 12 months, according to CoinMarketCap.
Bitcoin’s rally has also been fueled by crypto faithful, who expect even bigger 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 cryptocurrency, which is limited by design. As bitcoin approaches scarcity, its value is expected to increase.
The timing of Bitcoin’s new high is notable, Trenchev said, because the asset typically hits a new high after the halving. But the rise in ETFs accelerated the rally.
“This could mean we face an earlier, sharper and shorter bull cycle, followed by a painful and prolonged collapse,” he said.