Bitcoin Hits New Record High, Boosted by Exchange-Traded Funds in U.S.
Summary:
Bitcoin (BTC) set a new record, surpassing $69,200 on March 5, backed by major inflows from the newly established Bitcoin exchange-traded funds (ETFs) in the United States. Analysts anticipate a possible price objective between $100,000-$120,000 by Q4 2024. Bitcoin ETFs hold approximately 75% of the new investment in Bitcoin, contributing to the ongoing rally. However, volatility is projected post-halving, potentially affecting the cryptocurrency's future performance.
On March 5, Bitcoin (BTC), the pioneering cryptocurrency, marked a new record high, surpassing $69,200, a 5% increase within 24 hours. In the course of a week, it recorded a surge over 21%, breaking its previous record high of $68,990, established on Coinbase exchange on Nov. 10, 2021. This milestone was achieved following substantial inflows from the recently launched Bitcoin exchange-traded funds (ETFs) in the United States. The ETFs have brought about consistent and price-indifferent demand for Bitcoin, solidifying its reputation as a safe asset and consequentially, contributing to its price elevation, as noted in a research report by Bitfinex analysts, presented to Cointelegraph. The report posits a modest prediction of Bitcoin reaching a price target between $100,000-$120,000 by the last quarter of 2024, with the peak of the cycle anticipated in 2025 in terms of the total crypto market value. The presence of the spot ETFs could soften the downward volatility of Bitcoin after hitting new cycle peaks, as suggested by the analysts. They compared the current Bitcoin situation with the stabilized price trajectory observed after the launch of gold ETFs, following a significant price boost. Bitcoin ETFs have played a significant role in the ongoing rally so far. Till now, Bitcoin ETFs comprise around 75% of the new investments in the leading cryptocurrency, renewing its surge beyond the $50,000 mark realized on Feb. 15, per CryptoQuant research. A research report delivered on Feb. 26 by senior Bloomberg analyst Eric Balchunas and associate analyst Andre Yapp suggested that Bitcoin ETFs might surpass gold ETFs in terms of assets under management (AUM) in the forthcoming two years. Nonetheless, despite hitting a record, Paul Eisma, head of options trading at XBTO Futures, indicates possible volatility for Bitcoin post the halving. Eisma conveyed to Cointelegraph: "For the first time, the crypto ecosystem will experience concurrent pressure from the halving's deflationary supply impact and the continuing demand shock from the ETFs... The December 2024 options market's at-the-money forward break-evens are presently pricing within a range of $55,000–$85,000 with implied volatility hovering around 65%." This story is unfolding, and further information will be incorporated as it emerges.
Published At
3/5/2024 6:05:44 PM
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