Bitcoin prices are once again nearing record highs, sparking excitement and speculation among investors and financial experts. The cryptocurrency has experienced a surge in value in recent weeks, with prices reaching levels not seen since the historic bull run of 2017. This resurgence has reignited interest in Bitcoin as a viable investment option, with many predicting even greater gains in the near future.
The reasons behind this surge are varied, but some point to increased institutional adoption and mainstream acceptance of Bitcoin as a legitimate asset class. Others attribute the rise to growing concerns over inflation and economic uncertainty, prompting investors to seek out alternative stores of value.
The digital token on Monday climbed 8% to $67,310, well above its $44,000 valuation at the start of the year and less than $2,000 away from surpassing its November 2021 record high of around $69,000.
What's fueling the rally? Cryptocurrency watchers say bitcoin is soaring in part because demand is rising on so-called spot bitcoin exchange traded funds. The ETFs, which allow investors to dabble in crypto in a less riskier way than ever before, has attracted an huge influx of cash this year, experts said.
Among other bullish signs, Thielen noted a sizable decline of 63,000 bitcoins held on exchanges over the past 30 days. Coinbase alone, he said, has seen its balance fall from 400,000 to 372,000 in just one month.
It's not all about U.S. ETFs either, said Thielen. BlackRock, he reminded, just launched a spot ETF in Brazil last week, and volumes in Korea have exploded to $8 billion per day for five straight days versus less than $1 billion previously.
Crypto has also been getting a bid from the stock market, where the tech-heavy Nasdaq Composite reached an all-time high on Friday, becoming the last of the major stock indexes to hit a record close this year.
David Duong, head of institutional research at Coinbase, said that although March could be a month of sideways grinding for bitcoin, the cryptocurrency is benefiting from an AI- and blockchain technology-driven productivity boom he expects is here to stay.
Still, bitcoin's resurgence comes as welcome news to crypto investors, many of whom saw their assets plummet in value in 2022 after the collapse of FTX and other crypto exchanges. As the world's largest cryptocurrency, both in terms of trading volume and most mined, bitcoin is often looked to by financial analyst as a gauge of the overall health of the crypto industry.
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