Bitcoin hits record high, a stunning comeback
Bitcoin hit a record high of more than $69,000 on Tuesday, capping a remarkable comeback for the volatile cryptocurrency after its value plunged in 2022 amid a market meltdown.
Bitcoin's price has risen more than 300% since November 2022, a resurgence that few predicted when the price dropped below $20,000 that year. Its previous record was just under $68,790 in November 2021, as crypto markets boomed and amateur investors poured savings into experimental digital coins.
The cryptocurrency was “pronounced dead for the 150th time,” said Cory Klippsten, CEO of Swan, a financial services firm focused on bitcoin. “And bitcoin continues to do what bitcoin does, which is win people over as they take the time to actually learn about it.”
Bitcoin's recent surge has been driven by investor enthusiasm for a new financial product tied to the digital coin. In January, U.S. regulators authorized a group of crypto companies and traditional finance firms to offer exchange-traded funds, or ETFs, which track bitcoin's price. The funds provide a simple way for people to invest in the crypto markets without directly owning the cryptocurrency.
As of last week, investors had poured more than $7 billion into the investment products, propelling bitcoin's rapid rise, according to Bloomberg Intelligence.
The price of ether, the second-most-valuable digital currency after bitcoin, has also risen more than 50% this year, reaching about $3,800. Its increase has been driven partly by enthusiasm over the prospect that regulators may also approve an ETF tied to ether.
But cryptocurrencies remain volatile. Within a few minutes of hitting the record, bitcoin's price dropped to about $67,500.
And despite the euphoria, the crypto industry is still navigating the legal aftermath of the 2022 crash. Sam Bankman-Fried, the disgraced founder of the collapsed FTX crypto exchange, is set to be sentenced to prison at the end of March. The Securities and Exchange Commission has sued several prominent crypto firms, including the U.S. exchange Coinbase, arguing that the companies offer unregistered securities.
Courts have begun weighing in on some of those lawsuits, and the outcome could determine whether crypto companies can continue operating in the United States. Many skeptics remain unconvinced that digital currencies offer much realworld utility.
“There's no inherent value,” said John Reed Stark, a former SEC official and an outspoken critic of the crypto industry. “There's no proven track record of adoption or reliance.”
Bitcoin was invented in the aftermath of the 2008 financial crisis by a mysterious developer using the pseudonym Satoshi Nakamoto. The digital coin was originally envisioned as a decentralized alternative to the traditional financial system, a way for people to exchange funds without relying on banks or other intermediaries.