Bitcoin hit a record high on Tuesday, fuelled by investors pouring money into US spot exchange-traded crypto products and the prospect that global interest rates may fall.

The world’s largest cryptocurrency hit a high of US$69 202, topping November 2021’s all-time peak of $68 999.99. Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January.

“The bitcoin all-time high marks a turning point for crypto. Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market,” said Nathan McCauley, CEO and co-founder at Anchorage Capital in San Francisco.

“If you want to know why institutions are here for the long term, just look at the underlying economics. Between the new ETFs and upcoming halving, demand for bitcoin is rising while supply is diminishing.

“The industry used the bear market to build a more mature market structure, bringing traditional investment vehicles — like SEC-regulated ETFs — to crypto,” McCauley said.

“Now, we are seeing exactly what happens when the market has safe, secure and compliant access to the asset class — and institutions are just getting started.”

“Bitcoin recapturing its old high of $69 000 inspires a new set of superlatives for the oldest cryptocurrency that continues to divide opinion and conquer all comers with its returns,” said Antoni Trenchevm co-founder of Swiss crypto firm Nexo.

Risk on

“Bitcoin has been propelled past its 2021 high by a bunch of ETFs that are squeezing supply and that means its trajectory looks set to continue towards $100 000 and beyond.”

“One part of [bitcoin’s rally] has to do with the generally positive sentiment on risk in general. You can see that in the all-time high in the S&P 500 and Nasdaq. The other part of it is definitely the institutionalisation of interest in bitcoin through the ETFs that have been launched,” added Alvin Tan, head of Asia foreign exchange strategy at RBC Capital Markets in Singapore.

US approves bitcoin ETFs in watershed for crypto market

“Finally, I think after quite a volatile two-year period where there were a lot of scandals about crypto exchanges and crypto personalities, we haven’t had any of that for a few months, so we’re maybe seeing the dust settling on that.

“I’m not quite sure how one would value bitcoin, but certainly I think the rise in the last couple of months is quite extraordinary. I don’t really know if it’s going to continue at this speed.” — (c) 2024 Reuters