Bitcoin, the world’s largest cryptocurrency, reached a historic high on Tuesday, surging to $69,202 and surpassing its previous peak of $68,999.99 in November 2021. This upward momentum has been attributed to increased investor inflows into U.S.-listed spot bitcoin exchange-traded funds (ETFs) and growing anticipation of global interest rate decreases.
Investor enthusiasm has been particularly fueled by the approval of 11 spot bitcoin ETFs by the Securities and Exchange Commission (SEC) in late January. Despite a recent 3.3% decline, bitcoin is currently trading at $65,310.
Zach Pandl, Head of Research at Grayscale Investments, New York, NY, noted, “The rally’s immediate cause has been inflows into US-listed spot bitcoin ETFs, reflecting investor interest in bitcoin’s properties as an alternative ‘store of value’ and decentralized computing network.”
Art Hogan, Chief Market Strategist at B Riley Wealth in New York, emphasized the gradual adoption of spot bitcoin ETFs, stating, “The adoption of the new spot bitcoin ETF clearly has been a slow process but continues to gain momentum and that likely drives that imbalance of supply and demand.”
Laith Khalaf, Head of Investment Analysis at AJ Bell in Manchester, UK, cautioned investors to exercise caution amid the market surge, stating, “Investors need to keep the ‘FOMO’ in check, especially when it comes to something as febrile as crypto.”
The recent surge in bitcoin’s value has drawn attention to the broader cryptocurrency market. Tai Wong, an Independent Metals Trader in New York, commented, “The primary driver behind bitcoin was the SEC approval of the spot bitcoin ETF and the significant inflows that have come in as a result. The surging stock markets and corresponding overall bullish sentiment has also helped.”
Brian Dobson, Managing Director at Chardan Capital Market, highlighted the short-term impact of ETFs on bitcoin’s performance, stating, “This is a near term event, but in the short term you have buying pressure from the ETFs driving Bitcoin higher.”
Mark Connors, Director of Research at 3IQ in Hoboken, NJ, pointed out a significant shift in the market cycle, noting, “This is the first time an all-time high was reached before the halving – that’s the number one takeaway for me when considering how this cycle could be different.”
As the cryptocurrency market continues to evolve, experts offer diverse perspectives on the driving forces behind bitcoin’s recent record-breaking performance. Whether influenced by ETF adoption, macroeconomic factors, or the evolving perception of bitcoin as a legitimate investment, the current rally underscores the dynamic nature of the cryptocurrency landscape.
