Bitcoin briefly touches all-time high before retreat

Bitcoin briefly touched an all-time high Tuesday of more than US$69,000 before losing thousands of dollars of value within hours.

The record high surpassed the level bitcoin previously hit in November

2021, before it fell below US$17,000 at the start of last year under pressure from rising interest rates and the downfall of major crypto exchange FTX.

As of mid-afternoon Tuesday, the cryptocurrency was trading around US$64,500, according to Coindesk.

The debut in January of bitcoinfocused exchange traded funds (ETFs) in the U.S. has been the biggest price driver lately, said Alfred Lehar, a finance professor at the University of Calgary’s Haskayne School of Business.

The ETFs are attracting many people who wanted to own bitcoin, but didn’t understand how to open a crypto wallet or didn’t trust centralized exchanges, he said.

“This is a very easy way to get exposure to bitcoin for everybody, and it seems that people are taking it up.”

While Canada has had bitcoin ETFs for years, the regulatory approval of U.S.-based options has attracted billions of dollars of investments to the products.

The latest run-up has also been boosted by more established financial groups entering the space, said Mariam Humayun, an assistant professor at the University of Ottawa’s Telfer School of Management.

“One thing that’s interesting, and maybe a little bit different this time, is that there’s a lot more institutional buyers who are playing in the game.”

She said that the cryptocurrency has been declared dead many times, but the latest recovery helps show its staying power.

“One of the things that keeps on recurring is that it is resilient to a lot of the setbacks,” said Humayun.

“So I think it’s become something that’s just hard to ignore for a lot of institutions out there.”

Investors of all sizes are being drawn to the crypto space, and not just to the latest ETFs.

Toronto-based WonderFi, owner of Coinsquare, said the crypto exchange saw a more than 300 per cent increase in trading volumes from its 30-day average as the price rose to a record high in Canadian dollars last week.

It said some obscure meme-coins have seen volumes rise by thousands of per cent as speculation in the market builds.