- Bitcoin hits $69,000 record
- Volatility and investor caution noted
- Institutional investments drive surge
Over $69,000, the price of Bitcoin, the largest cryptocurrency in the world, has reached a new all-time high.
It exceeds the previous benchmark established in November 2021; however, Bitcoin’s value has declined to $16,500 by 2022.
This new price surge was precipitated by the investment of billions of dollars by US financial behemoths in bitcoins.
Professor of finance at Sussex University, Carol Alexander, predicted that its price could increase further but cautioned that cryptocurrencies were “notoriously volatile.”
She stated that in the past, price crashes were frequently timed so that average investors who purchased Bitcoin during the surge lost money.
The establishment of the new record signifies an additional moment of great significance in the turbulent history of Bitcoin.
The inventors, who claimed to be Satoshi Nakamoto, created the technology in 2009; however, their true identities remain unknown.
Initiated to generate funds for online transactions, its origins can be traced back to an anti-establishment ideology that urged individuals to lead lives liberated from the prevailing authority of financial institutions and governments.
Nevertheless, its recent peak in value is a direct result of the establishment firms devoting billions of dollars to its acquisition.
This achievement was facilitated by the reluctance of US regulators to sanction several spot Bitcoin exchange-traded funds (ETFs) in January 2024.
This enabled prominent investment firms such as Blackrock, Fidelity, and Grayscale to offer products that were pegged to the value of Bitcoin.
They have collectively purchased hundreds of thousands of bitcoins, causing their value to increase substantially.
These newcomers, according to Professor Alexander, “are luring institutional investors to Bitcoin and exerting a substantial upward pressure on its price.”
However, she added that the April “halving” of Bitcoin could potentially impact the value of the cryptocurrency.
She stated that these occurrences have historically been accompanied by price increases.
Bitcoin peaked at approximately $69,200 shortly after 15:00 GMT on Tuesday, before declining to approximately $67,000.
In the past month, its value has increased by more than fifty per cent, according to the cryptocurrency market data platform CoinMarketCap.
Extreme variations
This will be a moment of great jubilation for numerous Bitcoin holders, as their wealth will have increased substantially.
History, however, indicates that they ought to be ready for that to alter.
In June 2022, Bitcoin experienced its most significant decline in value in nearly 18 months, reaching a level of nearly $20,000. This decline was driven by investors’ inclination to distance themselves from more volatile investments in light of the pessimistic global economic forecast.
Later that year, when FTX, the enormous cryptocurrency exchange founded by the so-called “king of crypto” Sam Bankman-Fried, declared insolvency in November 2022, the price of the cryptocurrency continued to decline.
It experienced further fluctuations throughout 2023, but by the end of the year, it had recovered to trade above $40,000.
Not only corporations and individual investors have been attentively monitoring these fluctuations.
President of El Salvador, Nayib Bukele, has adopted the cryptocurrency in Central America.
The leader of the developing nation, who adores Bitcoin, has spent over $100 million of public funds purchasing nearly 3000 bitcoins over the past few years.
His initial investment is currently worth approximately 60% more than what he paid for it. Nevertheless, public records regarding the specifics remain undisclosed.
