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Bitcoin soars above $60K as spot ETFs drive trending frenzy, lead to Coinbase crash

Bitcoin soared above $60,000 on Wednesday for the first time in more than two years, as the popularity of spot ETFs reignited trading enthusiasm for the volatile cryptocurrency and sent popular crypto exchange Coinbase crashing.

Bitcoin’s price soared to nearly $64,000 in the early afternoon, close to its November 2021 all-time high of $68,789, but fell back to around $61,000 by 6 p.m. It has fallen. This represents an 18% increase in the leading digital currency compared to a week ago and a 40% increase compared to a month ago.

Amid Wednesday’s bull market, Coinbase, the largest digital asset exchange, warned users that its website was experiencing problems, but users complained that their digital wallets were showing “$0.00.” He also assured customers that his assets were safe.

A series of interest rate cuts by the Federal Reserve this year have increased investors’ appetite for higher-yielding and more volatile assets. AP

“We are dealing with a spike in traffic and apologize for any issues you may experience,” Coinbase CEO Brian Armstrong wrote in a post on X.

The bullish move for the world’s most popular crypto token could be the start of what Split Capital’s Zaheer Ebtikar calls “a pretty obvious FOMO-like rally.”

“More and more people are buying it,” Ebukitar told Bloomberg.

Experts say the early success of the recently approved Spot Bitcoin ETF (which allows investors to take stakes in Bitcoin-holding funds offered by BlackRock, Fidelity, etc.) played a key role in this rally. told the Post.

The boom drove $520 million into BlackRock’s Bitcoin ETF, a single-day record.

“The fact that this is happening at the same time as ETFs, and you look at those inflows, that seems to be a pretty big driver of this issue.” [rally]” said Colin Harper, head of research at Bitcoin mining software company Luxor.

“A large part of the population looks at regulatory approvals as, ‘Well, the state agrees to this, we’re not going to ban it, the agencies are already authorized.’ . . .” added Harper.

Trading volumes at three of the most popular companies, run by Grayscale, Fidelity and BlackRock, have soared. Getty Images

However, other market experts warned that investors could soon see a “sharp correction” of more than 20%.

“The move is very sharp and the leverage is very high at the moment,” Jaime Baeza Baeza of AnB Investments told Bloomberg.

The total market capitalization of the cryptocurrency market remained at a whopping $2.31 trillion as of Wednesday afternoon, after surpassing the $2 trillion threshold for the first time in two years earlier this month.

Cryptocurrency has reemerged as a hot asset alongside other trending stocks such as AI chip maker Nvidia and weight loss drug maker Eli Lilly, according to Jake Dollarhide, CEO of Longbow Asset Management. It’s surfacing.

There’s also a wave of FOMO (fear of missing out) as individual investors scramble to capitalize on the trend.

“With the SEC approving ETFs such as BlackRock, there is further momentum for it to become legal. And, frankly, the garbage has been taken to the curb in the form of Binance and FTX.” Dollarhyde he said. “If we remove some of the bad actors, we can rebuild trust within the cryptocurrency industry.”

Inflows into the 10 largest spot Bitcoin ETFs brought in $420 million on Tuesday alone, the highest amount in nearly two weeks, according to LSEG data. Reuters

The recent rise in Bitcoin prices has brought it closer to reaching an all-time high of $69,000. This is a number that seemed unachievable over the past two years, as the so-called “crypto winter” crushed demand for cryptocurrencies.

Bitcoin’s 2021-2022 woes were compounded by a number of scandals, including the collapse of convicted crypto fraudster Sam Bankman Fried’s FTX empire.

Other bullish factors include investors’ optimism that the Federal Reserve will lower extremely high interest rates at some point this year, as well as a reduction in the amount of digital currency people receive, expected in April. Bitcoin’s “halving,” a pre-planned event, is looming. “Mining” is halved.

The purpose of Bitcoin halving is Ensuring currency scarcity over time. The exact impact each halving has on Bitcoin’s value is debated among experts, but Bitcoin’s price has skyrocketed ahead of past halvings that occurred in 2020, 2016, and 2012. are doing.

“As we approach the halving, the supply of new coins will be cut in half while demand will be supported by ETFs,” said Christopher Alexander, principal analyst at Pioneer Development Group.

“Once small retail investors fully regain trust in crypto exchanges, there will be a level of demand pressure we have never seen before,” Alexander added.

with post wire

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