Bitcoin Sets New Record: Surpasses $71,000 and Overtakes Silver
Bitcoin has achieved a remarkable milestone by surpassing $71,000, solidifying its position as the digital equivalent to gold and overtaking the market capitalization of silver. This achievement has been occurring frequently since early March and today Bitcoin reached a new all-time high of $72,750, marking a 5% daily increase and a 12% gain over the past week. The consistent climb of Bitcoin highlights its relentless ascent in the financial world.
UK Regulator Permits Trading of Cryptocurrency-Backed Securities
The price of Bitcoin surged to a new all-time high of nearly $73,000 following the announcement from the UK’s Financial Conduct Authority (FCA) that it would allow the trading of cryptocurrency-backed securities. This surpassed the previous peak of nearly $69,000 set in November 2021. The FCA stated that it would not raise objections to investment exchanges establishing a market segment for cryptoasset-backed exchange traded notes (cETNs) on the UK list. However, the FCA maintains that cryptoassets are mainly unregulated and high-risk investments.
Neil Wilson, chief analyst at brokerage firm Finalto, sees the FCA’s action as positive for the cryptocurrency market. He also noted that while parabolic market movements tend to conclude with a significant pullback, it is uncertain whether this will happen with Bitcoin.
Bitcoin ETF Inflows Drive Crypto Markets
The surge in US spot bitcoin exchange-traded fund (ETF) inflows is playing a significant role in cryptocurrency price dynamics. According to CoinShares, there have been record-breaking weekly inflows of $2.7 billion and a year-to-date total of $10 billion, approaching the annual record of nearly $11 billion set in 2021. This influx of funds has contributed to increased leverage in the crypto market and heightened price fluctuations.
Bitcoin Halving and Scarcity
Another factor driving the bullish upswing in Bitcoin’s price is the forthcoming halving event. NiceHash estimates that the halving will occur in around 35 days. This event, which has happened three times before, involves a decrease in the compensation provided to Bitcoin miners for processing new blocks on the network. With this fourth halving, the incentive will decrease from 6.25 BTC to 2.125 BTC, further reducing the supply of new coins.
The scarcity-driven nature of Bitcoin has long been seen as a fundamental component of its value trajectory. Similar to gold, the limited supply of Bitcoin strengthens its allure as a store of value in the digital era.
Hot Take: Bitcoin Reaches New Heights
Bitcoin continues to reach new heights, surpassing $71,000 and setting a new all-time high of $72,750. Its consistent climb demonstrates its growing importance in the financial world and solidifies its position as a digital equivalent to gold. The UK’s decision to permit trading of cryptocurrency-backed securities has further boosted Bitcoin’s price. Additionally, record-breaking inflows into Bitcoin ETFs are driving cryptocurrency markets and contributing to increased volatility. With the forthcoming halving event, which will reduce the supply of new coins, Bitcoin’s scarcity-driven value trajectory is expected to continue.
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