Bitcoin crosses $60,000 mark, approaching new all-time high

At around 1325 GMT, Bitcoin was trading around $60,520.

London:

Bitcoin surpassed the $60,000 mark on Wednesday, approaching a new all-time high and continuing its unbridled rise since the approval of a new type of investment tied to the cryptocurrency.

Bitcoin was trading around $60,301 as of $1325 GMT, having closed at an all-time high of $68,991 set in November 2021, which some analysts believe is now within reach.

Since being approved by U.S. securities regulators on January 10, a Bitcoin-indexed exchange-traded fund (ETF) would theoretically enable the wider public to invest in the cryptocurrency without directly holding it. However, the funds themselves do invest in digital currencies.

Anticipated approvals of new investment products caused its price to rise in recent months, but by the end of 2022, its price had fallen significantly following the bankruptcy of several crypto giants.

Mikkel Morch of specialist fund ARK36 noted that the launch of ETFs or ETPs (exchange-traded products) in the United States “injects a new wave of optimism, driving trading volumes and attracting crypto-related companies.”

In terms of accessibility to everyday investors, these instruments are comparable to stocks or mutual funds.

Some investors eager to recoup their bets initially triggered a massive wave of withdrawals after the GBTC (Grayscale Bitcoin Trust) fund converted to an ETF.

But once the selling frenzy subsided, flows into U.S. Bitcoin ETFs such as asset management giant BlackRock increased.

Crypto-asset-related investment products listed on exchanges have attracted about $5.7 billion since the beginning of the year, according to calculations released by asset management firm CoinShares on Monday.

-“Institutional Recognition”-

Morch said Monday’s announcement by software company MicroStrategy that it had purchased an additional 3,000 Bitcoins (valued at $155 million at the time) was further evidence of “increasing institutional recognition driving the price increase.”

The transaction brings its total Bitcoin holdings to 193,000 Bitcoins (approximately $6.09 billion).

Bitcoins are created, or “mined,” as rewards when powerful computers solve complex problems to verify transactions on the blockchain.

Tickmill analyst James Harte noted that Bitcoin prices have also received a boost as major industry players invest in Bitcoin ahead of the “halving,” when the coin’s miner rewards are split in two.

The event is held approximately every four years, with the next one taking place in April.

This is expected to slow down the rate at which new Bitcoins enter the market, reducing potential purchases of the cryptocurrency, which should increase its value.

Nigel Green, principal at financial advisory firm deVere Group, said: “As the pace of new Bitcoin issuance slows, the digital asset’s existing scarcity becomes more pronounced, often leading to increased demand and therefore prices. rise.”

He added: “Cryptocurrencies remain highly speculative, but significant interest in spot ETFs and the upcoming halving event… are expected to continue to drive current momentum, which could lead to Bitcoin breaking through the $69,000 mark.”

Hopes that the Federal Reserve will begin cutting interest rates this year as inflation eases also boosted virtual stocks.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)