The price of bitcoin has soared to a new all-time high, continuing its rapid resurgence that began in late 2023.
Bitcoin reached $68,818 early Tuesday morning, significantly higher than its $44,000 valuation at the beginning of the year. The surge in bitcoin has also positively impacted the prices of other popular cryptocurrencies like ether and Solana this week.
The rally is being fueled by increasing demand for spot bitcoin exchange traded funds, which offer a less risky way for investors to get involved in crypto. This surge in demand has led to a substantial influx of cash into the cryptocurrency market this year.
According to Joel Kruger, a market strategist at LMAX Group, investors are attracted to bitcoin as an uncorrelated asset for portfolio diversification. Spot bitcoin ETFs provide direct exposure to bitcoin without the need to hold the actual asset.
The U.S. Securities and Exchange Commission approved the sale of spot bitcoin ETFs in January, leading to significant investments in these funds. Some of the world’s largest institutional investors, including BlackRock and Fidelity Investments, now offer spot bitcoin ETFs.
The surge in bitcoin’s price began in late 2023, reaching a 19-month high in December. Factors contributing to this surge included anticipation of spot ETF approvals, expected Fed rate cuts in 2024, and the upcoming halving event for bitcoin mining rewards.
Despite the ongoing price rally, bitcoin remains a volatile asset as highlighted by Laila Maidan, investing correspondent at Insider. Maidan cautioned that the cryptocurrency’s value can fluctuate unpredictably due to trading activity.
For crypto investors, bitcoin’s resurgence is positive news after facing value declines in 2022 following the collapse of exchanges like FTX. As the largest cryptocurrency by trading volume and market capitalization, bitcoin’s performance is often seen as an indicator of the overall health of the crypto market.
