Key Points
- Bitcoin (BTC) reached a new peak of $69,170, surpassing its previous highest of $69,044.
- The recent approval of Bitcoin ETFs by US regulators has significantly contributed to this bullish rally.
Bitcoin (BTC), the leading cryptocurrency, achieved a new record by surpassing its previous highest value of $69,044 on Tuesday. The digital asset reached a peak of $69,170, driven by several factors that have reignited investor interest.
Factors Driving Bitcoin’s Bullish Rally
The primary trigger for this bullish rally has been the recent approval of Bitcoin ETFs (exchange-traded funds) by US regulators. After extensive delays, the Securities and Exchange Commission (SEC) finally approved these innovative products in January 2023.
The approval of Bitcoin ETFs has led to a significant influx of institutional and retail capital into the cryptocurrency market. In just two months, these ETFs have attracted over $50 billion, with BlackRock’s iShares fund managing over $10 billion in BTC.
Within a week of their launch, Bitcoin ETFs ranked second among individual commodity-based products with the highest assets under management (AUM). This achievement took gold products several years to reach.
The operational simplicity of ETFs has made Bitcoin more accessible to traditional investors. This is further bolstered by the anticipation of a reduction in new Bitcoin issuances due to the upcoming “halving” event scheduled for April, which historically has led to substantial price increases.
Analysts’ Perspectives on Bitcoin’s Future
Several analysts have provided their views on Bitcoin’s bullish rally and price projections. Aurelie Barthere from Nansen suggested that the end of the cycle of rate hikes stipulated by the Federal Reserve likely contributed to BTC’s rebound since November 2023.
Alex Thorn from Galaxy Digital expressed optimism about Bitcoin’s price increase in statements to CNBC. He explained that Bitcoin becomes more useful as it grows more valuable, and its decreasing volatility over time allows for larger allocations.
However, some analysts, such as Ed Tolson, CEO and founder of the crypto hedge fund Kbit, warn of possible short-term corrections. He commented that the market is prepared to experience a sharp correction at any time, possibly between 10% and 20%, which could trigger massive liquidations. Despite this, he remains bullish in the long run.
At the time of writing, BTC is trading at $64,340, nearly 7% below its historical high of $69,170. Nonetheless, the crypto market’s enthusiasm over Bitcoin’s milestone continues unabated.
