Bitcoin passed the $60,000 mark on Wednesday, and is approaching its absolute record, continuing its frantic rise since the approval of a new type of investment indexed to cryptocurrency.
Early Wednesday afternoon in London, bitcoin was trading around $60,301, narrowing the gap with its all-time high of $68,991, reached in November 2021. Several factors explain this rise.
The SEC has “generated a new wave of optimism”
The anticipation of the authorization of a new investment product following the price of bitcoin had contributed in recent months to the rise in prices, which had largely fallen at the end of 2022, after the bankruptcy of several giants in the sector.
Since its approval on January 10 by the American market watchdog, the SEC, this new type of investment, an index fund (ETF) indexed to bitcoin, theoretically allows a wider public to invest in these cryptocurrencies without having to hold directly.
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The start of the marketing of this product has “generated a new wave of optimism, causing transaction volumes to soar,” notes Mikkel Morch, of the specialized fund ARK36.
Some investors wanting to recoup their stakes had initially generated a wave of massive withdrawals from the GBTC fund (Grayscale Bitcoin Trust), once it was converted into an ETF.
But once the selling fever subsided, flows into US bitcoin ETFs, such as that of asset management giant BlackRock, increased.
Investment products linked to publicly traded cryptoassets have attracted around $5.7 billion (approximately €5.15 billion) since the start of the year, according to calculations by asset manager CoinShares published on Monday.
“Growing institutional support”
Further proof of "the growing institutional support which is fueling the rise in prices", according to Mikkel Morch, the software company Microstrategy announced on Monday that it had purchased an additional 3,000 bitcoins (the equivalent of $155 million at then prices). according to Microstrategy founder Michael Saylor), bringing his total bitcoin holdings to 193,000 bitcoins (approximately $6.09 billion).
Bitcoin's price has also been boosted by expectations that the US Federal Reserve (Fed) and other major central banks will begin cutting interest rates this year, reducing the attractiveness of the dollar and US Treasuries to investors. investors.
The “halving” is approaching
Finally, notes James Harte of Tickmill, prices are also supported in the short term because large players in the sector are investing in bitcoin before a technical phenomenon called “halving”, expected in April.
Bitcoin is created – or “mined” – as a reward when powerful computers solve complex problems.
But the quantity of bitcoins is limited and approximately every four years the reward given to the “miners” who mine it is halved.
The upcoming halving is expected to slow the speed at which new bitcoins enter the market, therefore strengthening its value.
Since the last halving in May 2020, “the price of bitcoin has increased by more than 600%”, notes Simon Peters, analyst at eToro, and although the percentage of increase decreases between each cycle, “it is very possible that the price peak is somewhere in the six figures.”