Bitcoin soared to an unprecedented peak on Friday, surpassing the $70,000 milestone for the first time. The surge in the leading cryptocurrency was fueled by a combination of factors, including robust investor appetite for newly introduced US spot exchange-traded crypto products and anticipation of a global decline in interest rates.
Bitcoin's value peaked at an impressive $70,105 before experiencing a swift downturn, ultimately settling at $68,317.72 at last trading.
Billions of dollars have poured into Exchange-Traded Funds (ETFs) in recent weeks, providing significant momentum to the market. Additionally, optimism is bolstered by anticipated upgrades to the Ethereum blockchain platform, which hosts the second-largest cryptocurrency, Ether.
The forthcoming bitcoin "halving" event in April, which slows the pace of bitcoin production, further contributed to market confidence.
Challenges amidst the surge
Following Tuesday's record high, Bitcoin experienced a sharp reversal, plunging more than 10% below the $60,000 threshold. Antoni Trenchev, co-founder of crypto lending platform Nexo, cautioned about the inherent volatility of bitcoin bull markets, predicting potential sudden downturns ranging from 10% to 20%, Reuters reported.
The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a significant milestone for the industry, signalling a shift from the prolonged crypto winter characterized by bankruptcies and scandals.
The optimism surrounding Bitcoin's surge has also spilled over to other digital assets, notably Ether, which has seen a remarkable increase of over 60% since the beginning of the year. Ether's value currently stands at $3,939.84, reflecting the broader bullish sentiment in the cryptocurrency market.
Rising tide lifts crypto stocks
The positive market sentiment has extended to crypto-related stocks, with shares of Coinbase rising by 8.2% and crypto miners Riot Platforms and Marathon Digital experiencing gains of 5.1% and 9.6%, respectively, underscoring the growing investor interest in cryptocurrency-related equities.
