Bitcoin’s price marked a two-year high on Monday. At one point it surged to $67500, the closest it has come since it peaked at $68,999.99 in November 2021.
The last few weeks have seen inflows into US-listed bitcoin funds surge. The latest spike is spurred by hopes that the launch of Bitcoin exchange-traded funds (ETFs) will encourage new buyers of the currency.
In the past month, the value of Bitcoin has soared by over 50%, a notable renaissance for the cryptocurrency which many analysts had assumed was ‘irrelevant’ or ‘dead‘ in 2022. In June that year, bitcoin saw a major fall when the U.S. Securities and Exchange Commission sued one of the leading cryptocurrency exchanges in the world, Binance. By the end of 2022, bitcoin prices dropped below $20,000 and began 2023 at $16,605, before steadily rising throughout the year.
Spot bitcoin ETFs create new interest
Spot bitcoin exchange-traded funds (ETFs) are a financial product allowing investors to gain exposure to bitcoin price movements without holding the asset itself. Unlike bitcoin futures ETFs, spot bitcoin ETFs invest directly in bitcoin, rather than derivatives contracts based on prices. The first spot bitcoin ETFs were launched in January 2024 following approval by the US Securities and Exchange Commission.
Bitcoin is the largest cryptocurrency by market value and was the world’s first decentralised currency, using blockchain to secure and verify transactions. The sharp rise has been an exciting event for investors, creating appetite to draw further investment in.
A volatile history for bitcoin
Earlier in the week, the cryptocurrency exchange platform, Coinbase, issued an update after some users faced an outage during intraday training on Wednesday, as bitcoin surged to a price that then marked its highest in years. Coinbase acknowledged the issue on the 28 February and was working quickly to fix it. Coinbase co-founder and CEO, Brian Armstrong, said the outage was due to a surge in traffic.
The surge highlights the latest wave in popularity, reminiscent of that seen back in 2021. The cryptocurrency has experienced a volatile path of valuations since its creation in 2009. A blogpost issued by European Central Bank in 2022 warned of the price turbulence, highlighting that while the value of bitcoin might have broken records of nearly $69,000 in November 2021, the price came crashing down to just $17,000 by mid-June the following year.
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“In a world where Nasdaq is making new all-time highs, crypto is going to perform well as bitcoin remains a high-volatility tech proxy and liquidity thermometer,” Brent Donnelly, trader and president at analysis firm Spectra Markets told Reuters. “We are back to a 2021-style market where everything goes up and everyone is having fun.”