Bitcoin reached a historic high on Tuesday, driven by the excitement in the cryptocurrency sector since the approval on the American market of a new type of investment accessible to a wider audience.
The cryptocurrency star rose to $69,191.94, surpassing its previous high of $68,991, recorded in November 2021. “The price of bitcoin has reached new highs” and continues to climb, notes James Harte, analyst at Tickmill, who believes that investors remain “resolutely optimistic about the “upside prospects”.
The first of the cryptocurrencies by capitalization, which weighs more than 1,300 billion dollars to date according to the Coingecko site, has started a crazy race for several months.
Its price has jumped by more than 50% since the start of the year alone, and has tripled over the past year, a spectacular rise after the collapse of prices following the collapse of several giants in the sector at the end of 2022. After its previous peak, bitcoin collapsed to around $15,000 in November 2022 following the bankruptcy of the FTX exchange platform, until then a flagship company in the sector.
His boss at the time, Sam Bankman-Fried, was accused along with other executives of having used client accounts without their knowledge to fuel the speculative operations of his own investment company.
Regulators, who are still struggling to effectively regulate cryptoassets, regularly warn against the mirage of stupendous gains which can encourage buyers to bet big and lose big, or to fall into the trap of fraudulent systems.
In 2017, a previous cycle of frenzied enthusiasm had already been followed by a collapse in the price.
“Buying in the wake of a price spike is rarely a good idea,” says Laith Khalaf of AJ Bell.
“Previous episodes have shown that those who enter when the frenzy reaches its peak suffer extreme losses,” recalls the analyst.
Buying fever
For several months, the price of bitcoin has been supported by the anticipation of the authorization on the American markets of a new investment product, an investment fund (ETF) indexed to bitcoin, allowing a larger part of the public to invest in these cryptoassets without holding them directly.
The launch of this investment in the United States initially sparked a wave of massive outflows, in particular from investors in the GBTC fund (Grayscale Bitcoin Trust), eager to take their profits once this fund was transformed into an ETF.
The trend has since reversed.
Since their launch, funds of this type, such as that of the largest asset manager in the world, BlackRock, have accumulated “assets which represent more than 3% of all existing bitcoins”, notes Simon Peters, analyst at eToro , interviewed by AFP.
The sector also sees this approval as proof of the growing interest of institutional investors in cryptocurrencies, which further boosts enthusiasm for bitcoin.
Finally, another upcoming event supports prices: “halving”, a technical phenomenon which consists of halving the bitcoin reward granted to bitcoin “miners” – those which contribute to the creation of the blockchain by validating transactions.
The “halving” takes place every 210,000 blocks – or groups of transactions verified and incorporated on the “blockchain” – which corresponds to approximately every four years.
The next one is currently scheduled for April.
By reducing the quantity of bitcoins available for purchase, this phenomenon should therefore strengthen the value of bitcoins, notes Charles Morris, analyst at ByteTree.