Bitcoin surged to an all-time high on Friday amidst turbulent trading, as enthusiasm for cryptocurrencies continued to captivate investors.
The primary digital currency surpassed $70,000 for the first time, bolstered by investor interest in new U.S. spot exchange-traded crypto products and expectations of a global decline in interest rates.
In recent weeks, billions of dollars have poured into ETFs, with additional support stemming from optimistic forecasts, including an upgrade to the Ethereum blockchain platform, which hosts the bitcoin competitor, Ether, and an upcoming “halving” event for bitcoin in April, which reduces the rate of bitcoin creation. The green light given by the U.S. Securities and Exchange Commission to 11 spot bitcoin ETFs in late January marked a significant milestone for the industry, following a challenging 18-month period marked by corporate bankruptcies and scandals.
Even institutional investors, previously wary of crypto due to its volatility, have begun committing long-term investments, potentially bolstering the current rally. Data from LSEG indicates that net inflows into the ten largest U.S. spot bitcoin funds totaled $2.2 billion in the week ending March 1, with over $2 billion directed to BlackRock’s iShares Bitcoin Trust.
The recent positive sentiment surrounding bitcoin has also benefited other digital currencies, particularly Ether, the second-largest cryptocurrency by market capitalization, which has surged by over 60% since the beginning of the year.
Nevertheless, some analysts remain cautious, highlighting the speculative nature of these assets. Following its record high on Tuesday, bitcoin experienced a sharp reversal, dropping over 10% and falling back below the $60,000 mark.
