Bitcoin Hits Record Above $72,000 As Demand Frenzy Intensifies

Bitcoin hit a record high above $72,000 on Monday, as the most significant cryptocurrency’s surge showed no signs of slowing down.

BTCUSD Weekly chart

BTCUSD Weekly chart

Bitcoin was last up 4.4% at $72,649 after reaching as high as $72,739.

The world’s most valuable cryptocurrency has been boosted by a flood of cash into new spot bitcoin exchange-traded funds and hopes that the Federal Reserve will soon cut interest rates.

“The recent surge in Bitcoin’s value … underscores the remarkable strength and resilience of the leading cryptocurrency. This achievement not only marks a significant milestone but also reflects the continued confidence and demand in the market,” Bitfinex analysts said in a research note.

LSEG data showed that capital flows into the 10 largest US spot bitcoin exchange-traded funds slowed to a two-week low until March 8 but reached almost $2 billion.

“Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it,” DailyFX strategist Nick Cawley said.

The supply of bitcoin, limited to 21 million tokens, is set to get tighter in April when the so-called “halving” event occurs.

Every four years, the rate at which new supply is released into circulation and the reward for crypto miners is halved, which tends to support the price.

Since Bitcoin has been a financial asset for less than two decades, predicting its price trajectory remains challenging. Just months after retail exuberance helped drive Bitcoin to its previous record in November 2021, the cryptocurrency crashed, taking half the crypto industry.

Britain’s financial watchdog became the latest regulator to pave the way for digital asset trading products on Monday, saying it will now permit recognised investment exchanges to launch crypto-backed exchange-traded notes.

The UK regulator, the Financial Conduct Authority (FCA), said these products would be available only to professional investors, such as investment firms and credit institutions authorised to operate in financial markets.

The FCA warned that crypto exchange-traded notes (ETNs)—bonds issued by financial institutions that track underlying asset performance—could harm retail investors.

Nonetheless, demand is picking up across the investment community.

Weekly data from the US Commodity Futures Trading Commission showed that asset managers hold the most bullish position on record in bitcoin futures.

In the week to March 5, the net long position held by asset managers – usually interpreted as covering holdings of institutional investors such as mutual funds and pension funds – rose to 15,531 lots, worth $5.5 billion based on the current bitcoin price.

Ethereum rose 3.97% to $4,062.07, its highest level in two years. Speculation that US regulators may approve the listing of spot ether ETFs this year has driven the price up 75%.

In crypto stocks, shares of Coinbase (NASDAQ:COIN) rose 2.8%. In comparison, crypto miners Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA) fell 2.2% and 6.1%, respectively.

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