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Bitcoin excitement continues unabated: On Friday, the crypto reserve currency rose above $70,000 for the first time. By mid-afternoon, the largest cryptocurrency by market cap had risen to a record high of $70,184 on trading platform Bitstamp. However, Bitcoin quickly gave up its gains. It was last traded at $68,507.
Analyst Timo Emden commented, “The prospect of falling capital market interest rates globally clearly benefits interest-free investments such as Bitcoin.” “Interest rate cut fantasies are fueled by the latest US jobs report.” The US employment report released on Friday fell short of expectations and confirmed expectations for a rate cut in June. Emden said that the current situation shows that investors’ risk appetite has not yet been satisfied.
The market value of all Bitcoins ever “mined” using computing power is currently worth approximately $1,400 billion. For comparison: Amazon’s enterprise value was about $1.850 billion at the beginning of March. At 1.280 billion, the Facebook group Meta is already worth less than all Bitcoins.
Bitcoin price currently only knows the upside. Just last Tuesday, the cryptocurrency broke $69,000 and reached a new all-time high. This year’s gains are huge: In January, the crypto reserve currency was temporarily trading below $40,000. Previously, the rise from the recent lows to above $40,000 in November 2022 took more than a year.
ETFs as a spark
According to market observers, the latest increase is mainly due to three factors. First, the approval of exchange-traded funds, or ETFs for short, which received the green light from the U.S. Securities and Exchange Commission in mid-January 2024.
Bitcoin spot ETFs have enabled institutional investors to invest directly in Bitcoin for the first time without having to hold the cryptocurrency. Since January, major Bitcoin ETF providers such as Blackrock and Fidelity have recorded a steady inflow of capital to invest in the blockchain currency. Latest figures estimate more than $7 billion since launch.
“Halfing” and the stock market bull market
Secondly, another so-called “halving” will occur in April. The reward given to “Bitcoin miners” who verify Bitcoin transactions will be halved, thus slowing the growth in the new Bitcoin supply, the number of which is limited to a maximum of 21 million units.
Third, the recent record sentiment on stock markets is seen as an additional boost for risky assets, including the crypto market. Interest rate cuts expected by central banks later in the year, some of which have already been priced in, are likely to have an additional supportive effect.
Bitcoin dominates
Market observers also believe that the oldest and best-known cryptocurrency is unlikely to be replaced by one of the smaller digital currencies, at least in the foreseeable future. So far, Bitcoin’s market cap still accounts for half of the crypto market, which is around 2.8 trillion.
The market overall was worth just over $3 trillion at its all-time high. If this were to happen again and half went to Bitcoin, the price would mathematically be $77,000. (SDA/month)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
