Bitcoin rockets to record high
Bitcoin soared to a new record high on Tuesday, fueled by investors pouring money into U.S. spot exchange-traded crypto products and the prospect that global interest rates may fall.
The world's largest cryptocurrency hit a high of $69,202, topping November 2021's all-time peak of $68,999.99. Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFS in late January. It then traded lower and was last at $65,792.
“The bitcoin all-time high marks a turning point for crypto," said Nathan Mccauley, CEO and co-founder of crypto platform Anchorage Digital. "Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market."
Bitcoin's meteoric nearly 160 per cent ascent since October, of which 44 per cent came in February alone, marks a sharp contrast to 2022, when the market was beaten into an 18month long crypto winter, plagued by a string of high-profile corporate bankruptcies and scandal.
Net flows into the 10 largest U.S. spot bitcoin funds reached $2.2 billion in the week ended March 1, with more than $2 billion of that going into Blackrock's ishares Bitcoin Trust, according to LSEG data.
"We've been fielding more questions from the field on bitcoin, especially now that there are more efficient and cheaper ways to own bitcoin after the recent slew of ETF launches," said David Wagner, a portfolio manager at Aptus Capital Advisors.
RISK ON
In addition to demand from a wider pool of investors, bitcoin, and crypto generally, has gotten a boost from the prospect of the Federal Reserve cutting U.S. interest rates, which often prompts investors to divert capital into assets that are higher yielding or more volatile.
“One part of (bitcoin's rally) has to do with the generally positive sentiment on risk in general," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. "You can see that in the all-time high in the S&P 500 and Nasdaq."
Investors have lapped up crypto, mega-cap technology stocks and investment-grade corporate bonds in particular this year.