The rising of Bitcoin to new record

Bitcoin rises after rapid climb to new record

LONDON, March 6 — Bitcoin rallied again today in volatile trade, while ether jumped almost 10 per cent as crypto mania continued to sweep through the investment community.

Bitcoin rose by as much as 6.8 per cent to a session high of US$67,645, after having dropped 6 per cent yesterday from an earlier record high above US$69,000. It was last up 5.7 per cent at US$66,896.

Ether, meanwhile, surged by 9.8 per cent to its highest since January 2022. It was last up 8.6 per cent at US$3,827.

Bitcoin has already surged 55 per cent this year so far, fuelled by investors pouring money into US spot exchange-traded crypto products and the prospect that global interest rates may fall.

Billions of dollars have flowed into ETFs in the past few weeks and the market is getting extra support from an outlook that includes an ethereum upgrade and bitcoin "halving," which slows the flow of bitcoin minting, said Lennix Lai, global chief commercial officer at crypto exchange OKX.

"The trend also indicates an elevated level of mainstream acceptance of bitcoin, perhaps more than ever before."

The approval of 11 spot bitcoin ETFs by the US Securities and Exchange Commission in late January had marked a watershed moment for the industry, following an 18-month long crypto winter plagued by a string of high-profile corporate bankruptcies and scandals.

Even institutional investors who once shunned crypto due to its sharp and wild moves, have begun committing long-term money too, which experts say could help sustain the latest leg of this rally.

The recent optimism over bitcoin has also spilled over to other digital tokens, particularly ether, which ranks second behind bitcoin in terms of total market value, up more than 60 per cent since the start of the year.

Still, some say it's hard to shake off the speculative nature of these assets. After hitting the record high on Tuesday, bitcoin sharply reversed course and fell more than 10 per cent back below the US$60,000 level.

"That looks like classic bitcoin behaviour - it chews you up then spits you back out," said Matt Simpson, senior market analyst at City Index.

"A pump and dump to previous record highs wiped out some weaker hands, and I suspect we're now in the volatile and erratic phase we usually see when it reaches a record high."

Deutsche Bank strategist Jim Reid noted that bitcoin is some way off an all-time high in real, or inflation adjusted, terms.

"Consumer prices are up by over 10 per cent since the previous November 2021 peak, so in real terms, that would be above US$75,000 in today’s prices," he said. — Reuters

Posted on 06-Mar-2024