Bitcoin prices are on the verge of hitting all-time highs, with crypto enthusiasts on edge in anticipation of unprecedented levels. However, in terms of market value, the token has already reached records.
Bitcoin's market capitalization reached $1.35 trillion, expanding to its peak of $1.28 trillion from November 2021, according to data from CoinGecko. That was the month the token reached the peak of its pandemic-era bull market, soaring to $68,991.85.
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Since then, Bitcoin's supply has increased and its value has reached new heights amid the oldest virtual currency's recent rally. The digital asset was little changed from around $67,360 on Tuesday, having previously reached $68,804.
Historically, record market values have been “a more reliable price signal that a new phase of the current market is beginning,” said David, head of research at crypto prime broker FalconX. Rowant says.
Demand from a new spot Bitcoin exchange-traded fund in the US and an impending decline in the token’s increasing supply are fueling the recent rally. ETFs like BlackRock and Fidelity Investments have attracted nearly $8 billion in net inflows since their Jan. 11 debuts.
Speculative enthusiasm is returning to cryptocurrencies more broadly, from leveraged bets in derivatives markets to intraday double-digit advances in meme coins. For example, open interest in Chicago-based CME Group's Bitcoin futures market rose to record levels on March 4th.
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Investor wide-ranging positioning suggests that digital asset markets are potentially vulnerable to a reversal if ETF demand begins to moderate. But for now, movements in the spot, ETF, and derivatives markets are largely bullish.
“This has been a flow show driving price action,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
© 2024 Bloomberg
