05/03/2024
London/Singapore — Bitcoin hit a record high on Tuesday, fuelled by investors pouring money into US spot exchange-traded crypto products and the prospect that global interest rates may fall.
The world’s largest cryptocurrency hit a high of $69,202, topping November 2021’s all-time peak of $68,999.99. Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January. It then traded lower and was last at $67,266.
“The bitcoin all-time high marks a turning point for crypto,” said Nathan McCauley, CEO and co-founder of crypto platform Anchorage Digital. “Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market.”
Bitcoin’s meteoric ascent of nearly 160% since October, of which 44% came in February alone, marks a sharp contrast to 2022, when the market was beaten into an 18-month long crypto winter, plagued by a string of high-profile corporate bankruptcies and scandal.
Net flows into the 10 largest US spot bitcoin funds reached $2.17bn in the week to March 1, with more than half of that going into BlackRock’s iShares Bitcoin Trust, according to LSEG data.
In addition to demand from a wider pool of investors, bitcoin, and crypto generally, has received a boost from the prospect of the Federal Reserve cutting US interest rates, which often prompts investors to divert capital into assets that are higher yielding or more volatile.
“One part of (bitcoin’s rally) has to do with the generally positive sentiment on risk in general,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. “You can see that in the all-time high in the S&P 500 and Nasdaq.”
Investors have lapped up crypto, mega-cap technology stocks and investment-grade corporate bonds in particular this year.
