Who is fueling Bitcoin’s “craziness” with $71,000 standing?

　　On March 11, Beijing time, Bitcoin experienced another “surge”.

During the session, the price of Bitcoin exceeded $71,000, setting another record high.

As of 20:00, Bitcoin's latest price was $71,530, an intraday increase of 2.7%.

　　In the past month, Bitcoin has experienced a wave of gains and has hit record highs several times.

Looking forward, Bitcoin hit a record of $68,999.99 per coin in November 2021.

Since February 28, in just half a month, Bitcoin has successively exceeded the US$60,000 and US$67,000 mark, and exceeded US$69,000 on the evening of March 5, setting a record high for the first time.

On the evening of March 8, Bitcoin exceeded US$70,000 intraday.

　　The record has been set three times in a week. What factors are driving Bitcoin’s “crazy”?

The market generally believes that "halving" is an important factor driving the price of Bitcoin.

　　"Having" refers to the halving of the rewards received after producing new blocks, which occurs approximately every four years and will reduce the supply of Bitcoin.

The new round of "halving" will occur in April. It is expected that on April 23, the block reward will drop from 6.25 (BTC) to 3.125 (BTC).

　　Another key is the issuance of Bitcoin ETFs.

On January 11, the U.S. Securities and Exchange Commission officially approved the listing of Bitcoin ETF, and the trading volume on the first day reached 4.6 billion U.S. dollars. As a result, the trading prices of cryptocurrencies including Bitcoin began to skyrocket.

　　“The U.S. Securities and Exchange Commission’s approval of the Bitcoin spot ETF is undoubtedly a major milestone. It opens the door to digital assets for investors in the traditional financial system, bringing huge capital inflows and boosting market confidence.” Yu Jianing, co-chairman of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, told a Beijing Business Daily reporter.

　　BitMEX Research data shows that as of March 8, BlackRock IBIT held 197,943 Bitcoins, worth more than $13.5 billion.

Yu Jianing pointed out that institutional investors usually adopt long-term investment strategies, and their participation reduces market volatility and improves market stability.

The increase in institutional demand also shows that more and more professional investors are beginning to recognize the value of Bitcoin in asset allocation, especially in the current economic environment, where investors seek assets to hedge the risks of inflation and currency depreciation.

　　Currently, a steady stream of money is pouring into Bitcoin spot ETFs issued by heavyweight investment companies such as BlackRock and Fidelity Investments.

Taken together, in less than two months, the net inflow of nearly US$8 billion and the “halving” of Bitcoin simultaneously triggered bullish sentiment in the market.

　　It is worth noting that as of March 11, the market value of Bitcoin has risen to US$1.398 trillion, surpassing silver’s market value of US$1.379 trillion, becoming the eighth largest asset in the world by market value.

In addition, Ethereum also exceeded the $4,000 mark for the first time since December 2021, rising by more than 70% during the year.

　　This news further stimulated the market’s recognition and optimism towards cryptocurrency.

"Bitcoin's rise to the status of the eighth largest asset in the world marks its maturity in the fields of investment and value storage." Yu Jianing said.

This achievement reflects the market's increased confidence in Bitcoin and its technology, marking the digital asset field moving from an early speculative stage to a stable development, attracting the attention of a wide range of investors and institutions.

As an important asset class, the rise of Bitcoin has forced the financial community and investors to re-evaluate its role in the modern economy and financial system, triggering a rethinking of traditional financial assets.

　　As Nathan McCauley, CEO and co-founder of digital asset bank Anchorage Digital, said, “Bitcoin’s all-time high marks a turning point for cryptocurrencies. Traditional institutions once sat on the sidelines, and today, they are here full force as the main drivers of the bull market. To go".

　　Bitcoin’s surge shows no signs of slowing down, and “good news” to stimulate the market is coming again.

The London Stock Exchange announced on March 11 that it will begin accepting applications for admission to Bitcoin and Ethereum ETNs in the second quarter of 2024, with the exact date "to be announced in due course."

　　Given the multiple signals, does Bitcoin still have room for further upside?

What's the future?

Yu Jianing pointed out that digital assets led by Bitcoin can be considered a "future asset" whose value can effectively travel through economic cycles.

Digital assets can be understood as a mirror of the development of the digital economy. Just as the stock market reflects the relationship between real industries, the revaluation of digital assets reflects the development and prosperity of the digital economy.

However, as a highly volatile asset, the price of Bitcoin may experience severe fluctuations in the short term, which largely depends on market sentiment, macroeconomic environment, regulatory policies and other factors.

　　Yu Jianing also reminded that the fluctuation of Bitcoin price is part of its essential attributes, and any investment decision should be based on sufficient market research and personal risk tolerance.

Understanding the status of Bitcoin in digital assets and the deep-seated logic of the relationship between digital assets and the digital economy is of great significance for investment decisions and market analysis.

　　Beijing Business Daily reporter Yue Pinyu Dong Hanxuan