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Why is Bitcoin rising? – Forbes Advisor
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Bitcoin (BTC) set another all-time high this morning as it surpassed the $72,000 level for the first time, bringing the world’s oldest. cryptocurrency even closer to doubling in price just in the first months of 2024.
Today’s gains bring Bitcoin’s year-to-date total return to over 70%, with a gain of over 4% in the last 24 hours.
Last week, BTC broke its previous intraday trading record of $68,990 before ending the week around $68,000.
Over the weekend, BTC continued its climb. Now, bitcoin has not only recovered all the ground lost since the start of crypto winter in May 2022, but has also set several new highs for the first time since November 2021.
Furthermore, Ethereum (ETH) is also winning. ETH is also up more than 3% in the last 24 hours. The leading altcoin is now worth over $4,000, which is a significant gain but still shy of its pre-crypto winter high of over $4,700, which was set in November 2021.
Why is Bitcoin rising now?
Current bullish sentiment in bitcoin emerges as the UK version of the US Security and Exchange CommissionThe Financial Conduct Authority, or FCA, said it is willing to consider trading Bitcoin and Ethereum-based exchange-traded notes, also known as ETNs, in the United Kingdom
ETNs are similar to what the US calls exchange traded funds.
This news comes on the heels of continued investor optimism surrounding the SEC approval on Jan 10, 11 Spot bitcoin ETFs.
Spot bitcoin ETFs allow institutional trading of bitcoin at its spot or current price.
Previous bitcoin ETFs could only trade bitcoin futures. Futures are complex derivative instruments suitable for trading only by experienced investors.
Spot Bitcoin ETFs sent BTC price soaring
As many investors expected before the SEC’s green light in January, the opening of the world’s oldest cryptocurrency to institutional investors provided a significant price catalyst.
For example, BlackRock’s iShares Bitcoin ETF (IBIT), one of 11 new spot bitcoin ETFs, purchased more than $778 million worth of BTC on March 6 alone. This added up to 12,600 bitcoins flowing into IBIT’s coffers, which reduced the total supply available in the world. Furthermore, with the help of increased demand, purchasing IBIT increased the overall value of BTC.
Mikkel Morch, founder of digital asset fund ARK36, says: “The positive momentum in the cryptocurrency space is further reinforced by the impact of spot bitcoin ETFs in the US, with very substantial funds continuing to flow. advances, shows the growing recognition of cryptocurrencies. . . by Western financial authorities.”
Following the SEC’s approval of the first US spot bitcoin ETFs, BTC jumped from less than $50,000 at the time of approval to more than $72,000.
Is Bitcoin Facing a Price Correction?
With the heights that bitcoin has now reached, fear of a price correction is creeping into the minds of some traders. Although bitcoin has risen steadily since the US introduced spot bitcoin ETFs, cryptocurrencies, including bitcoin, have a history of extreme volatility.
Bitcoin and other cryptocurrencies have suffered after a wave of bankruptcies, collapses and negative decisions that rocked the crypto world in 2021.
First, there was Earth LUNA Coin disaster, which began crypto winter that can.
After a brutal summer for crypto investors, the collapse of major FTX crypto exchange in November of that year it seemed like a fatal blow to cryptocurrencies.
Then, throughout 2023, both the SEC and Commodity Futures Trading Commission filed several regulatory lawsuits against some of the biggest exchanges and crypto companies. These lawsuits have harmed the ability of many exchanges and other crypto companies to do business in the US, the world’s largest economy.
During this period, bitcoin fell from its pre-crypto winter high of nearly $65,000 to a low of nearly $16,000 before beginning its recovery. That was a 75% price swing in just over a year.
What does Bitcoin’s recovery mean for investors?
While bitcoin appears to be in the midst of a significant bull run, there is of course no way of knowing how far the cryptocurrency will go before seeing another correction.
While it increasingly appears that Bitcoin is on the rise again in the long term, traders of BTC and other cryptocurrencies are in unprecedented territory regarding several factors. These include the geopolitical climate, economic indicators, crypto regulation, and the Fed’s intentions regarding interest rates.
Investors in the cryptocurrency industry have learned that even in the best of times, it is difficult to predict the short-term price action of digital assets. This is particularly true in this market environment.