Bitcoin hits new peak as traditional capital enters cryptocurrency market

Bitcoin reached a new all-time high on Monday, breaking free from a period of stagnation that had raised doubts about the future of the cryptocurrency market.

The price of Bitcoin, the original and most popular digital currency in the world, hit $68,791, surpassing the previous record of $68,789 set on November 10, 2021.

Bitcoin's recent surge in value has been greatly boosted by the approval of exchange-traded funds linked to the digital currency by US regulators. This has made it easier for traditional investors to add bitcoin to their investment portfolios.

This approval was the result of persistent efforts by cryptocurrency companies over several years. The Securities and Exchange Commission reluctantly granted approval after a court decision criticized the regulator for rejecting previous bitcoin ETF applications without valid reasons.

The first 11 “spot” bitcoin ETFs — which track the real-time market price of the asset — launched in January.

A representation of the Bitcoin cryptocurrency is being displayed in Brussels, Belgium, on December 6, 2023.

A representation of the Bitcoin cryptocurrency is being displayed in Brussels, Belgium, on December 6, 2023.

Jonathan Raa/NurPhoto/Getty Images

Related article

SEC gives bitcoin ETFs the green light

After only one month, ETFs had attracted over $4.2 billion in new investments, as reported by Bloomberg.

ETFs are investment instruments that follow a group of assets but are traded like stocks. One of the reasons why a bitcoin ETF is attractive is because investors can invest in bitcoin through their regular brokerage firm instead of needing to create a digital wallet through a cryptocurrency exchange.

Bitcoin, the leading cryptocurrency, serves as a key indicator for the entire $2 trillion crypto market. Unfortunately, the industry's reputation has taken a hit due to various negative incidents such as high-profile bankruptcies, market volatility, and the conviction of Sam Bankman-Fried. Sam, once a prominent figure in the crypto world, was found guilty in November for embezzling billions from FTX exchange customers, leading to the collapse of the platform in late 2022.

Despite the challenges faced by the crypto industry, Bitcoin continues to show resilience. Accounting for more than half of all cryptocurrencies in circulation, Bitcoin has seen a remarkable growth of over 200% in the past 12 months, as reported by CoinMarketCap.

The bitcoin rally is being driven by the crypto enthusiasts, who believe that there will be more gains this spring due to an event called the “halving.” This event, which happens roughly every four years, cuts the number of bitcoin being released into circulation in half. This is a feature of bitcoin, which is designed to be limited in supply. As the supply of bitcoin decreases, the value is predicted to increase.

Editor's P/S:

The recent surge in Bitcoin's value is a testament to the resilience of the cryptocurrency market despite challenges faced by the industry. The approval of Bitcoin ETFs by US regulators has eased traditional investors' access to digital currency, contributing to the current rally. The upcoming "halving" event, which reduces the supply of new bitcoins, further fuels optimism among crypto enthusiasts.

However, it's important to note that the cryptocurrency market remains volatile, and investors should exercise caution. The industry has been plagued by negative incidents, including high-profile bankruptcies and fraud. It's essential for investors to conduct thorough research and invest only what they can afford to lose.