© Reuters. FILE PHOTO: Representation of the cryptocurrency bitcoin is seen in this illustration taken January 11, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
By Hannah Lang
(Reuters) – briefly rallied to a record high on Friday in volatile trading, as crypto mania continued to sweep the investment community.
The leading cryptocurrency surpassed the $70,000 mark for the first time, driven by investor demand for new US spot exchange-traded crypto products and expectations that global interest rates will fall.
It rose as high as $70,105 before falling rapidly, and was 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 an event bitcoin “halving”. which slows down the flow of bitcoin minting, in April.
Still, some say it's difficult to get rid of the speculative nature of these assets. After hitting an all-time high on Tuesday, bitcoin sharply reversed course and fell more than 10% below the $60,000 level.
“Navigating old highs is notoriously tricky and the bitcoin dam doesn't tend to burst the first time you apply,” said Antoni Trenchev, co-founder of crypto lending platform Nexo. “Volatility defines bitcoin bull markets, and 2024 will be riddled with sudden, heartbreaking drops of 10% to 20%.”
The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a watershed moment for the industry, following an 18-month crypto winter plagued by a series of bankruptcies and high-profile corporate scandals.
Even institutional investors, who once shunned cryptocurrencies due to their sharp and wild movements, have begun to commit money for the long term, which analysts say could help sustain the latest leg of this rally.
Net flows into the 10 largest US spot bitcoin funds reached $2.2 billion in the week ending March 1, of which more than $2 billion went to BlackRock's iShares Bitcoin Trust (NYSE:), according to LSEG data.
The recent optimism about bitcoin has also spread to other digital tokens, particularly ether, which is second behind bitcoin in terms of total market value, up more than 60% since the beginning of the year.
Ether was last up 1.62% at $3,939.84. Cryptocurrency stocks also rose on Friday, with shares of Coinbase (NASDAQ 🙂 rising 8.2%, and those of cryptocurrency miners Riot Platforms (NASDAQ 🙂 and Marathon Digital (NASDAQ 🙂) rising 5.1% and 9.6%, respectively.
