Bitcoin reached a record high on Friday, surpassing the $70,000 mark in volatile trading, as enthusiasm for cryptocurrencies continues to sweep through the investment community.
The leading cryptocurrency briefly peaked at $70,105, driven by investor demand for new U.S. spot exchange-traded crypto products and expectations of falling global interest rates.
However, the price quickly retreated, with bitcoin last trading at $68,317.72.
Recent weeks have seen billions of dollars flowing into ETFs, supported by upgrades to the ethereum blockchain platform and anticipation of a bitcoin “halving” event in April, which slows the rate of bitcoin minting.
Despite these positive developments, some remain cautious, noting the speculative nature of these assets. Bitcoin experienced a sharp reversal on Tuesday, dropping more than 10% after hitting a record high and falling back below the $60,000 level.
Antoni Trenchev, co-founder of crypto lending platform Nexo, commented, “Navigating old highs is notoriously tricky, and the bitcoin dam doesn’t tend to burst at the first time of asking. Volatility defines bitcoin bull markets, and 2024 will be littered with sudden and gut-wrenching 10%-20% plunges.”
The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a significant milestone for the industry, following a period of decline and scandals during the crypto winter.
Institutional investors, once hesitant due to the asset’s volatility, are now committing long-term money, potentially sustaining the latest rally.
According to LSEG data, net flows into the 10 largest U.S. spot bitcoin funds reached $2.2 billion in the week ended March 1, with BlackRock’s iShares Bitcoin Trust receiving over $2 billion.
The optimism surrounding bitcoin has also impacted other digital tokens, notably ether, up more than 60% since the start of the year. Ether was last trading at $3,939.84, while crypto stocks, including Coinbase, Riot Platforms, and Marathon Digital, also saw gains on Friday.
