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© Reuters. FILE PHOTO: The representation of the cryptocurrency Bitcoin is seen in this illustration from January 11, 2024. REUTERS/Dado Ruvic/Illustration/Archive photo
By Hannah Lang
(Reuters) – Volatile trading briefly rebounded to a record high on Friday as the crypto craze continued to grip the investing community.
The leading cryptocurrency topped $70,000 for the first time, boosted by investor demand for new crypto exchange-traded products in the US and expectations that global interest rates will fall.
It rose as high as $70,105 before quickly falling and last trading at $68,317.72.
Billions of dollars have flowed into ETFs in recent weeks, and the market is getting additional support from an outlook that includes an upgrade to the Ethereum blockchain platform, home to the second-largest cryptocurrency Ether, and a Bitcoin “halving.” which slows the flow of Bitcoin minting in April.
Still, some say it’s hard to shake off the speculative nature of these assets. After hitting a record high on Tuesday, Bitcoin made a sharp reversal and fell more than 10% back below the $60,000 mark.
“Overcoming old highs is notoriously difficult and the Bitcoin dam won’t break right away,” said Antoni Trenchev, co-founder of crypto lending platform Nexo. “Volatility is driving Bitcoin bull markets, and 2024 will be marked by sudden and heartbreaking drops of 10% to 20%.”
The U.S. Securities and Exchange Commission’s approval of 11 spot Bitcoin ETFs in late January marked a turning point for the industry, after an 18-month crypto winter marked by a series of high-profile corporate bankruptcies and scandals.
Even institutional investors who once shunned cryptocurrencies due to their strong, wild moves have started putting in long-term money, which analysts say could help sustain the latest phase of this rally.
Net inflows 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 iShares Bitcoin Trust, according to LSEG data BlackRock (NYSE:) flows.
The recent optimism about Bitcoin has also spread to other digital tokens, particularly Ether, which is second only to Bitcoin in terms of total market capitalization and is up more than 60% since the start of the year.
Ether was last up 1.62% at $3,939.84. Crypto stocks also rose on Friday, with shares of Coinbase (NASDAQ:) last up 8.2% and crypto miners Riot Platforms (NASDAQ:) and Marathon Digital (NASDAQ:) up 5.1%, respectively. 9.6% increased.
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