Bitcoin price surges beyond $71,000, sets new all-time high record
Industry experts believe bull run is more due to influx of institutional capital and that retail participation has not reached the heights seen in 2021
Bitcoin’s price zoomed to an all-time high on Monday (March 11), surpassing its previous highest price of $71,000, with the London Stock Exchange’s announcement that it was accepting Bitcoin and Ethereum Exchange-Traded Notes (ETNs) from the second quarter of 2024.
The token that was the genesis of the cryptocurrency industry has been witnessing a huge rally this year that has now taken it to new heights.
Why has Bitcoin’s price been rising?
The single-most important reason can be attributed to the decision by the US Securities and Exchange Commission (SEC) to approve Bitcoin Exchange-Traded Funds (ETFs) in January this year. The SEC gave the green light for 11 ETFs for Bitcoin in a watershed moment for the crypto industry.
Major financial institutions like Blackrock, Fidelity, Valkyrie, and Vanguard launched their ETFs spurring a substantial influx of capital into bitcoin. Moneycontrol quotes a report by crypto research firm CREBACO that these ETFs have attracted almost $41 billion from institutional and individual investors during the past two months.
The second factor for the surge in bitcoin prices could be the Bitcoin halving event that is due to happen next month. Halving of Bitcoin happens about every four years when the reward for mining the crypto token is reduced by half.
The CREBACO report says that the halving event will reduce miner rewards from 6.25 to 3.125 BTC, and that historically, Bitcoin rallies have preceded halving events.
The third reason could be the London Stock Exchange’s announcement mentioned earlier. However, the Financial Conduct Authority (FCA) of Britain underlined that the crypto ETNs would be available only for professional investors like investment firms and authorised credit institutions, and cautioned retail investors that crypto ETNs could pose risks.
Are other crypto tokens also benefitting?
The rising tide in the crypto industry is leading to an increase in the prices of other prominent crypto tokens like Ethereum, Solana, and even memecoins like Shiba Inu. Solana and Ethereum have seen 12 to 15 per cent growth in the past one week while Shiba Inu has gone up by almost 28 per cent during the same period.
This is a welcome sign for crypto lovers after almost two years of instability caused by the FTX collapse, uncertainty around government regulations, and high taxation.
Experts in the industry believe that the present bitcoin bull run is more due to investment by institutional capital and that retail participation has not reached the heights witnessed in 2021.
There are also signs that some Bitcoin whales (owners of huge amounts of Bitcoin) may be selling a part of their portfolio during this bull run.
While the regulatory approvals in the US and Britain are encouraging signs for the crypto industry at large, it is important for retail investors especially to be mindful of the inherent volatility of this asset class.