Bitcoin BTC reached a record high on Tuesday, supported by the popularity of exchange-traded funds (ETFs) backed by the cryptocurrency and the prospect of a fall in global interest rates, mentions Reuters.
The world’s largest cryptocurrency reached a peak of $69,202 on Tuesday, surpassing the previous record of $68,999.99 reached in November 2021. The price of bitcoin then fell, reaching just over $65,000 at 5:46 p.m.
The value of bitcoin has increased dramatically, gaining 160% since last October, after a sharp decline in 2022.
“A turning point for digital assets”
“This summit marks a turning point for digital assets,” said Nathan McCauley, CEO and co-founder of the crypto platform Anchorage Digital. “Institutional investors were once on the sidelines; today, they are the main drivers of the rise of cryptoassets.”
Bitcoin and cryptocurrencies have benefited from the prospect of lower interest rates in the United States by the Federal Reserve, which incentivizes investors to redirect their capital towards higher-yielding or more volatile assets.
Analysts also believe that bitcoin has benefited from the “halving”, which will take place in April, and which increases the calculation volume necessary for “mining” a new bitcoin.
Stop or still?
Halving refers to the point in a four-year cycle when bitcoin mining rewards are cut in half. The crypto industry and investors expect the next halving to take place next April. Everything that is mined at the moment therefore brings in twice as much as what will be mined from next April.
Finally, investor interest in the cryptocurrency has increased since the Securities and Exchange Commission approved 11 bitcoin ETFs in late January.
On the other hand, many analysts are warning us to avoid a surge in the price of bitcoin. They claim that a sharp correction is likely to occur in the middle of the bull cycle. Cryptocurrency analyst Michael van de Poppe predicts that the price of bitcoin could fall to between $40,000 and $42,000 after the halving.
NFTs are coming back into the game
In the wake of the appreciation of Bitcoin, an entire virtual economy is waking up.
During the last week of February, the global NFT market traded $412.38 million, 35% more than a week ago. Industry analysts believe that NFT trading is being driven by the rising price of Bitcoin.
Bitcoin-based NFTs accounted for the lion’s share of trading volume, up 103% from the previous week to $154.82 million. Ethereum-based NFT transactions came in second, with $153.94 million, just behind.
It was the NFTs with a high value that were traded the most. Two NFTs were traded for over $1 million (including the Budgie NFT). There were 81 transactions worth more than $100,000 and 206 transactions worth more than $50,000.