Hyderabad: In a news that would make the investors happy, Bitcoin on Monday hit a new high and has breached the $71,500 mark. At the time of filing this report, the Bitcoin, also known as Btc was trading $71,500, as per data on CoinDesk.
The development comes after the collapse of the crypto exchange FTX severely damaged faith in digital currencies and sent prices plunging. Bitcoin price movements have been influenced by many factors like institutional adoption, macroeconomic trends, regulatory developments, and investor sentiment.
Recently, Bitcoin, which is the world's largest cryptocurrency jumped 4 four per cent and briefly surpassed $68,800, according to CoinMarketCap. Gains in recent months have been fueled by the anticipation and eventual U.S. approval of bitcoin exchange traded funds earlier this year, which provided access to a much broader class of investors.
The price for bitcoin has surged about 60 per cent since the approval of bitcoin ETFs in January, an easy way to invest in assets or a group of assets — like gold, junk bonds or bitcoins — without having to directly buy the assets themselves.
Also driving prices is what is known as bitcoin "halving" which is anticipated in April. Bitcoin halving, which occurs every four years, is when the reward for bitcoin mining is cut in half. This reduces how fast new coins are created — making supply more scarce.
In January, the U.S. Securities and Exchange Commission approved the first spot bitcoin ETFs from asset managers including Blackrock, Invesco and Fidelity. These newly-approved ETFs hold actual bitcoin — unlike previous bitcoin-related ETFs that were invested in contracts related to future price bets, but not on the cryptocurrency itself.
While analysts say that constrained supply in a time of high demand can push Bitocin’s price higher over time, others point to significant volatility that has resulted before and after halving events — and the possibility of sizable declines.
Bitcoin rocketed from just over $5,000 at the start of the pandemic to its November 2021 peak of nearly $69,000, in a period marked by a surge in demand for technology products. Prices crashed during an aggressive series of Federal Reserve rate hikes intended to cool inflation, slow money flows and make risky investments potentially riskier.
Then came the 2022 collapse of FTX, which left a significant scar on confidence in crypto. At the start of last year, a single bitcoin could be had for less than $17,000. Investors, however, began returning in large numbers as inflation started to cool. And 2023’s collapse of prominent tech-focused banks actually led more investors to turn to crypto as they bailed out of positions in Silicon Valley start-ups and other risky bets. (With AP inputs)
