Bitcoin mania has been resurrected, leading to the most spectacular comeback of the volatile cryptocurrency after sinking in 2022. Its price reached its highest record this Tuesday, reaching $69,200.
At the beginning of this year, bitcoin was valued at $44,400. Its price has risen more than 300% since November 2022, a resurgence that very few predicted when the price then plummeted to $20,000.
Its previous record was recorded in November 2021, with a value of $68,790. At that time the digital currency market was flourishing and amateur investors allocated their savings to this experimental industry.
The price has soared in a big way since US regulators approved a series of spot bitcoin exchange-traded funds issued by Wall Street stalwarts including Fidelity and Black Rock, the world’s largest asset manager.
This recovery has been led by the enthusiasm generated by a new financial product linked to the digital currency.
The new wave of capitalization has resulted in a 60% increase for this coin since the start of 2024 and has helped propel the flagship crypto token into uncharted territory.
More than $7.5 billion has flowed into the newly approved bitcoin ETFs since the first day of their marketing on January 11, according to investment group CoinShares. These ETFs allow investors to make forays into cryptocurrencies in a way that involves less risk than before, analysts noted, which is why they have attracted a large capitalization flow.
“Investors are becoming interested in the fact that bitcoin can be treated as a non-correlated asset, a circumstance that makes it very attractive for portfolio diversification,” market strategist Joel Kruger remarked on CBS.
A spot bitcoin allows investors to gain direct exposure to bitcoin without owning it. Unlike regular bitcoin ETFs, where bitcoin futures contracts are the underlying asset, these other bitcoins are the underlying asset of a spot bitcoin ETF. Each of these bitcoin spot ETFs are managed by companies that issue shares of their own bitcoin holdings purchased through other holders or through a licensed cryptocurrency exchange.
“The fever and hype around ETFs has turned out to be much further than anyone’s expectations,” Jad Comair, founder of investment fund Melanion Capital, told the Financial Times. “It’s not just a spectacular jump in price, it’s also a paradigm shift for bitcoin. Investors who allocate bitcoin today will be five or ten times more likely to do so with confidence than they would have done a couple of years ago,” he insisted.
There were other experts who wondered if some factor was being lost sight of, and if this could lead to another puncture, although they indicated that the territory is very different from that of 2022, when it was clearly in a bubble. Despite the euphoria, the sector is still navigating the consequences of that crisis, which was publicly reflected with the fall of Sam Bankman-Fried, founder of the FTX exchange and who, already in prison and convicted of multiple crimes, will face this month He is given a very long prison sentence.
