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UPDATE 2-Bitcoin hits record high above $72,000 as demand frenzy intensifies
(Updates prices, adds analyst comment in paragraph 4, context in paragraph 9, crypto stocks in paragraph 17)
By Hannah Lang, Amanda Cooper and Harry Robertson
WASHINGTON/LONDON, March 11 (Reuters) – Bitcoin hit a record high above $72,000 on Monday, with the cryptocurrency’s biggest rally showing no signs of slowing.
Bitcoin was last up 4.4% at $72,649 after hitting $72,739.
The world’s most valuable cryptocurrency has been boosted by an influx of cash into new Bitcoin spot exchange-traded funds and hopes that the Federal Reserve will soon cut interest rates.
“The recent rise in the value of Bitcoin (…) highlights the remarkable strength and resilience of the leading cryptocurrency. This achievement not only marks a significant milestone but also reflects the continued confidence and demand in the market,” said Bitfinex analysts in a research note.
Capital flows into the 10 largest U.S. cash exchange-traded funds slowed to a two-week low in the week to March 8, but still reached nearly 2 billion dollars, according to LSEG data.
“Bitcoin started the week with a strong rally, taking the rest of the cryptocurrency space with it,” said DailyFX strategist Nick Cawley.
Bitcoin’s supply, limited to 21 million tokens, is expected to tighten in April, during the so-called “halving” event.
Every four years, the rate at which new supply is released into circulation, as well as the reward for crypto miners, is halved, which tends to support the price.
Given that Bitcoin has been a financial asset for less than two decades, predicting its price trajectory remains extremely difficult. Just months after retail exuberance helped propel bitcoin to its previous all-time high in November 2021, the cryptocurrency collapsed, taking half the crypto industry with it.
Britain’s financial watchdog on Monday became the latest regulator to pave the way for digital asset trading products after
saying
On Monday, it will now allow recognized investment exchanges to launch exchange-traded notes backed by cryptocurrencies.
The UK regulator said these products would only be available to professional investors such as investment firms and credit institutions authorized to operate in financial markets, the Financial Conduct Authority (FCA) said in a statement.
The FCA has warned that crypto Exchange Traded Notes (ETNs) – bonds issued by financial institutions that track the performance of underlying assets – could harm retail investors.
Nonetheless, demand is growing in the investment community.
Asset managers now hold the largest bullish position ever in Bitcoin futures, according to weekly data from the U.S. Commodity Futures Trading Commission.
The story continues
In the week to March 5, the net long position held by asset managers – generally interpreted as covering the holdings of institutional investors such as mutual funds and pension funds – reached 15,531 lots , worth $5.5 billion based on the current price of Bitcoin.
Ether rose 3.97% to $4,062.07, around its two-year high. Speculation that U.S. regulators may approve the listing of ether spot ETFs this year has driven the price up 75% this year.
In crypto stocks, shares of Coinbase rose 2.8%, while crypto miners Riot Platforms and Marathon Digital fell 2.2% and 6.1%, respectively. (Reporting by Hannah Lang in Washington and Harry Robertson and Amanda Cooper in London; editing by Louise Heavens and Richard Chang)