Monday, April 22, 2024

Bitcoin hits record high of over $69,000

This resurgence, analysts argued, showcases the resilience of Bitcoin, which has consistently defied sceptics.

• March 6, 2024
BITCOINS
BITCOINS [Photo Credit: Forbes]

Bitcoin has soared to a staggering value of over $69,000 on Tuesday, marking a remarkable resurgence for the notoriously volatile cryptocurrency, the New York Times reported. This surge comes as a surprise to many, considering the tumultuous journey Bitcoin endured in 2022, when its value plunged amidst a broader market meltdown.

Since November 2022, Bitcoin’s price has skyrocketed by more than 300%, defying expectations after it dipped below $20,000 earlier that year. This resurgence, analysts argued, showcases the resilience of Bitcoin, which has consistently defied skeptics and continued to garner interest as more individuals delve into its intricacies.

Cory Klippsten, the CEO of Swan, a financial services firm specializing in Bitcoin, notes, “Bitcoin continues to do what Bitcoin does, which is win people over as they take the time to actually learn about it.” Indeed, despite numerous predictions of its demise, Bitcoin has proven its enduring appeal and utility.

The recent surge in Bitcoin’s value can be attributed in part to investor enthusiasm surrounding a new financial product tied to the digital currency. In January, U.S. regulators greenlit a series of exchange-traded funds linked to Bitcoin’s price, providing investors with a simplified avenue to trade in the crypto markets without owning the virtual currency. This regulatory approval sparked a frenzy of investment, with over $7 billion flowing into these products as of last week, further fuelling Bitcoin’s rapid ascent.

Notably, Bitcoin’s success has also bolstered the value of Ether, the second-most valuable digital currency. Ether’s price has surged by over 50% this year, reaching approximately $3,800, driven partly by optimism surrounding the potential approval of an ETF tied to Ether.

However, the volatility inherent in cryptocurrencies was once again on display as Bitcoin’s price swiftly dropped to around $67,500 mere minutes after hitting the record high. This volatility underscores the inherent risks associated with investing in digital assets.

Moreover, the crypto industry continues to grapple with legal challenges stemming from the fallout of the 2022 crash. Sam Bankman-Fried, the founder of the now-defunct FTX crypto exchange, is facing imminent sentencing, while the Securities and Exchange Commission has filed lawsuits against several prominent crypto firms, alleging the sale of unregistered securities.

The outcome of these legal battles could have significant implications for the future of crypto regulation in the United States.

Despite its remarkable rise, skepticism persists regarding the long-term viability and utility of cryptocurrencies. John Reed Stark, a former SEC official and vocal critic of the crypto industry, asserts, “There’s no inherent value… no proven track record of adoption or reliance.” Indeed, while Bitcoin was initially conceived as a decentralised alternative to traditional financial systems, its meteoric rise has primarily been driven by speculative fervor rather than widespread adoption for everyday transactions.

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