Bitcoin price tops $67,000: Could it hit all-time high this week? - Hindustan Times
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Bitcoin price tops $67,000: Could it hit all-time high this week?

Bloomberg |
Mar 05, 2024 08:01 AM IST

Bitcoin Price: The most liquid token rose as much as 6.7% to $67,069 - its first move above $67,000 since November 2021.

Few obstacles seem to be in the way of Bitcoin’s current rally. The largest cryptocurrency rose for the second straight day and marched closer to its all-time high, driven by expectations of exchange-traded funds’ robust demand at the week’s start.

Bitcoin Price: A bitcoin is seen in an illustration picture.(Reuters)
Bitcoin Price: A bitcoin is seen in an illustration picture.(Reuters)

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The most liquid token rose as much as 6.7% to $67,069 - its first move above $67,000 since November 2021. The token has surged around 60% so far this year, outpacing traditional asset classes such as stocks by a wide margin.

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“These conditions are reminiscent of some moments of late 2020 and 2021, of the bull market and extreme optimism,” said Jaime Baeza, founder at crypto hedge fund AnB Investments. “There is high leverage in the market and levels of greed are getting extreme.”

At the heart of this frenzy for the largest crypto token lies seemingly insatiable demand from US-listed Bitcoin ETFs, which began trading on Jan. 11. Bitcoin has jumped about 186% in the last 12 months.

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Net inflows of $7.35 billion have been invested since the debut of US Bitcoin ETFs from some of the biggest fund names, including BlackRock Inc. and Fidelity Investments. Even outsize outflows at one notable firm — nearly $9 billion at Grayscale Bitcoin Trust since the ETFs were listed — haven’t swayed traders. There were net outflows of about $140 million on Friday, with GBTC seeing around $490 million pulled from the fund.

“Given the low liquidity over the weekend, markets are moving north in anticipation that tonight’s ETF inflows will continue and prices will continue to rally,” said Hayden Hughes, co-founder of social-trading platform Alpha Impact.

Traders are betting on the price to soon cross the record of almost $69,000, reached during the Covid pandemic in November 2021, given the ETFs’ strong demand and concern of missing out ahead of Bitcoin halving, which is expected in April this year. After the halving — when the reward for mining is cut in half — the supply growth of the coin could come down, adding to the demand squeeze.

Other tokens known as altcoins, including Cardano and Polkadot, also were up Monday 7.4% and 10% respectively.

Memes Rise

Small-cap tokens, known as meme coins, also rose on the back of Bitcoin’s rally. Dogecoin was up nearly 20% and Shiba Inu 34% in the last 24 hours.

“This is a situation reminiscent of the 2021 bull run, with retail traders looking to make quick profits from rising prices in very volatile tokens,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.

Trading in crypto derivatives, which reflects traders’ positions, also signaled a bullish outlook. Open interest at Chicago-based CME Group’s Bitcoin and Ether futures market is just 1.8% away from their respective record highs. The increase in the number of outstanding contracts is a sign of greater interest in crypto-related exposure and hedging among US institutions.

“The all-time highs in Bitcoin should get tested in the short-term, with the important 70,000 level providing strong resistance,” Mauron said.

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