The crypto-currency Bitcoin has hit a new peak, with Monday morning trading pushing the price above $71,000.
Much of the latest spike – which added more than $30,000 to the price since the start of the year – came from large institutional inflows, such as the first-ever spot exchange-traded funds (ETFs) for bitcoin, which would open it up to billions in investment from BlackRock and Fidelity, among others.
This fever rose again after the London Stock Exchange announced it would open applications to trade bitcoin exchange-traded notes (ETNs) next month.
Incidentally, other major cryptocurrencies have also seen price bumps recently, as prices for Ethereum (ETH) and Solana (SOL) both saw over 10 percent spikes since last week, respectively.
On the crypto side, analysts have also pointed to Bitcoin’s impending ‘halving’ – a planned reduction in mining rewards due next month – and growing demand from mainstream money managers as signs that ever-great price surges will follow.
Ed Hindi, chief investment officer at the digital asset manager Tyr Capital, however, said Bitcoin’s price should continue its upward trajectory and that ”Provided US spot Bitcoin ETF flows remain strong, $100,000 for BTC in 2024 is not out of reach.”
Still, others remain skeptical about the market, with some experts forecasting that the halving could lead to heightened price volatility and perhaps a sell-off due to profit-taking.
Anyone with distant memories of Bitcoin’s record march in 2021 – from below $5,000 to more than $68,000 two years later – knows that those peaks are typically followed by price corrections, and, indeed, bitcoin subsequently retraced to below $20,000 over subsequent months.
Investors are used to big price swings, and as the cryptocurrency market continues to evolve, they should be prepared for unprecedented volatility.
Source: Anthony Cuthbertson, The Independent March 11, 2024
