Reuters London |
Singapore
London |
Singapore
Updated Tuesday, March 5, 2024-16:45
Bitcoin hit an all-time high on Tuesday, driven by investors putting their money into crypto products traded on the US stock exchange and the prospect that
global interest rates could fall
.
The world's largest cryptocurrency hit a high of
$69,202
, surpassing November 2021's all-time peak of $68,999.99.
Investor interest has increased since the Securities and Exchange Commission approved 11 Bitcoin ETFs in January.
Then, it fell and stayed at $68,440.
Bitcoin's nearly 160%
meteoric rise
since October, of which 44% occurred in February alone, marks a stark contrast to 2022, when the market was hit by
an 18-month crypto winter
, plagued by a series of high-profile corporate bankruptcies and scandals.
In addition to demand from a broader group of investors, Bitcoin, and cryptocurrencies in general, have received a boost from the prospect of the Federal Reserve cutting US interest rates, often leading investors to divert capital towards assets that
offer higher returns or are more volatile
.
"Bitcoin's all-time high marks a turning point for cryptocurrencies," said
Nathan McCauley
, CEO and co-founder of crypto platform
Anchorage Digital
.
"Traditional institutions were once on the sidelines; today they are here in full force as the main drivers of the cryptocurrency bull market."
Investors have taken advantage of cryptocurrencies, mega-cap tech stocks and
investment-grade
corporate bonds in particular this year.
Analysts say Bitcoin also benefited ahead of the April halving event, a process that takes place every four years in which
the token release rate is halved
.
The supply of Bitcoins
is limited to 21 million
, of which 19 million have already been collected.
Despite its recent popularity, for many investors, Bitcoin is simply too volatile and lacks enough real-world applications to be anything other than a
speculative asset
.
However, in addition to the cocktail of money flows into ETFs, the prospect of limited Bitcoin supply and an eventual decline in US interest rates,
some companies are adding cryptocurrencies
to their corporate coffers.
In February, software firm MicroStrategy – a long-time Bitcoin holder – said it had recently purchased around
3,000 more Bitcoins for $155 million
, while social media platform Reddit also said in a regulatory filing that it had bought small amounts of bitcoin and ether.