Bitcoin, also known as BTC, the largest cryptocurrency globally, was trading around \(70,000 on March 12. Surpassing its previous peak, BTC reached a new high of \)72,738, boasting a market capitalization of nearly $1.41 trillion.

The Fear and Greed Index for cryptocurrency currently indicates extreme greed. Bitcoin’s price surge to $72,738, breaking previous records, occurred even before the anticipated Bitcoin Halving event, which is projected to elevate the cryptocurrency to unprecedented levels.

Bitcoin Achieves New High of $72,000

Bitcoin soared to a new all-time high of \(72,738 after two years, driven by escalating interest in spot Bitcoin ETFs. Data from Farside Investors reveals that ETFs have seen a remarkable surge to \)6.7 billion since receiving approval from the Securities and Exchange Commission earlier this year. These Bitcoin ETFs are attracting an average daily inflow of approximately $332 million.

The recent months witnessed a surge fueled by institutional investments and increased retail engagement, propelled by the U.S. spot Bitcoin ETF application and the impending Bitcoin Halving. Concurrently, this surge aligns with a broader uptrend in the cryptocurrency market, with Ethereum (ETH) also hitting $4,035.

Parth Chaturvedi, the investments lead at CoinSwitch Ventures, emphasizes the significance of monitoring these flows as a key indicator of future price movements. The rising demand, coupled with the forthcoming supply reduction due to the fourth halving, could lead to an upward price trajectory.

Despite the surge, retail involvement has not reached the frenzy observed in 2021. Chaturvedi anticipates a more mainstream adoption of crypto as an asset class in the future.

Impact of $678 Million Inflow into Bitcoin ETFs on Price

In the past month, Bitcoin ETFs experienced a substantial inflow of around \(678 million. The BlackRock iShares ETF alone attracted \)520 million.

According to BitMEX research, the BlackRock iShare ETF leads in Spot Bitcoin ETF inflows, with a net inflow of approximately \(678 million by the end of February, of which \)520 million came from BlackRock alone. This marks the third-largest inflow pre-launch, with all nine spot Bitcoin ETFs witnessing significant trading volumes. The total net inflow for ETFs exceeded \(6.5 billion, holding assets worth over 141,000 BTC. Fidelity Bitcoin ETF saw \)126 million in inflows, while Ark 21Shares had a net inflow of $5.4 million. Other Spot ETFs also attracted robust inflows, reflecting strong bullish sentiment among institutional and retail investors.

In contrast, Grayscale’s GBTC experienced an outflow of \(125.6 million, signaling a shift from the previous \)22.4 million outflow.

Following the remarkable price surge on March 11, 2024, BTC hit \(72,000, setting a new all-time high before the Bitcoin halving. Subsequently, Spot Bitcoin ETFs experienced a notable downturn, with the total net flow decreasing from \)678.67 million on February 29 to $332.08 million on March 7, 2024, as reported by “The Block.”

BTC’s continuous surge to new highs indicates that investments by major institutional players such as BlackRock and MicroStrategy are yielding positive results.

MicroStrategy, a leading business intelligence firm, has significantly expanded its digital assets portfolio, surpassing BlackRock. While BlackRock currently holds 197,943 BTC, MicroStrategy has accumulated 205,000 BTC valued at approximately $821.7 million.

FCA Approves Crypto Asset Exchange Traded Notes for Professional Investors

The UK’s Financial Conduct Authority (FCA) recently announced the approval for recognized investment exchanges to launch crypto-backed exchange-traded notes (cETNs), joining other regulators in embracing digital assets.

These products are exclusively available for professional investors like credit institutions and authorized investment firms. However, the FCA cautioned that cETNs, bonds issued by financial institutions tracking underlying asset performance, could pose risks to retail investors.

The FCA emphasized the need for exchanges to maintain adequate controls, ensuring cost-effective and secure trading for professional investors. cETNs must comply with the UK listing regime, including ongoing disclosure and prospectus requirements. The FCA deems cETNs and crypto derivatives unsuitable for retail consumers due to associated risks.

The ban on selling cETNs to retail consumers remains in effect, with the FCA underscoring the high risk and limited regulation of digital assets.

BTC Surpassing $72,000 – Bull Run or Bull Trap?

Bitcoin’s surge to a new all-time high of $72,738 after two years prompts speculation about a potential bull run or a bull trap, urging investors to exercise caution. While Bitcoin is performing impressively, some traders view the surge as a bull trap, while others remain optimistic.

The cryptocurrency market’s robust performance raises concerns about potential bull traps amidst sudden price spikes. Factors such as Spot Bitcoin ETFs, Bitcoin Halving, and the ETH Dencun upgrade contribute to Bitcoin’s surge and new all-time highs.

The current market scenario resembles past patterns, suggesting a cautious approach as history indicates significant price fluctuations. Forbes Advisor India advises investors to tread carefully in BTC trading.

In Conclusion

The enthusiasm surrounding the approval of Bitcoin Futures ETFs in the U.S. has fueled optimism in the crypto industry, enticing investors to capitalize on the Bitcoin surge driven by the upcoming Bitcoin halving event and the ETH Dencun upgrade. However, caution is advised as the crypto market’s unpredictability and Bitcoin’s volatile nature underscore the need for careful investment strategies. The current surge could potentially be a deceptive bull trap, emphasizing the importance of prudent decision-making in cryptocurrency investments.