(Bloomberg) — Bitcoin continues to soar to record highs, boosted by an unprecedented amount of money flowing into crypto products and an impending decline in digital token supply growth.
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The original cryptocurrency reached an all-time high of nearly $72,881 on Monday and was trading at $72,220 as of 7:15 a.m. in London on Tuesday. A record $2.7 billion flowed into crypto assets last week, with the majority of that flowing into Bitcoin, according to a report by CoinShares international Ltd. Both the token and the gauge of up to 100 coins have risen about 70% this year.
The success of the Spot Bitcoin exchange-traded fund, which launched in the US on January 11, has been a major driver of recent momentum. ETFs such as BlackRock Inc. and Fidelity Investments Inc. have seen net inflows of about $9.5 billion so far. In the UK, the London Stock Exchange announced it would accept applications for Bitcoin and Ether listed bonds, while a Thai securities company said it would open foreign crypto ETFs to individual buyers.
institutional demand
“We're seeing a lot of adoption in the U.S.,” Ophelia Snyder, co-founder and president of 21Shares, said on Bloomberg TV. She said: “It's still quite early. Not all institutions and all news agencies have access.”
He added that the structure of the Bitcoin market is changing with the entry of Bitcoin, for example with a focus on US trading hours.
Some commentators point to the potential for further benefits. IG Australia market analyst Tony Sycamore said in a note that Bitcoin is expected to be “well supported on the downside by those looking to push it towards $80,000 in the coming months.” ” Fairlead Strategies LLC technical analyst Katie Stockton also suggested that $80,000 is within reach in the medium term.
futures market
In the derivatives sector, outstanding contracts (open interest) in Chicago-based CME Group's Bitcoin futures market reached a new peak. On Monday, that number exceeded 30,000 for the first time, according to data compiled by Bloomberg. This increase indicates growing demand from U.S. institutional investors for crypto-related exposures and hedging.
According to Kaiko Research, a cryptocurrency analysis firm, approximately 1,500 new “billionaire wallets” are being created every day due to the rise in Bitcoin prices, but due to the nature of blockchain data, which wallets are held by individuals and which ones are It is difficult to determine whether a company owns a company. However, this is still lower than the pace of millionaire wallets minted during the token's 2021 bull run, when more than 4,000 wallets per day reached the $1 million mark. .
Next month, Bitcoin will undergo an event known as the halving. This, as the name suggests, cuts the supply of new Bitcoin in half. Demand from ETFs, supply constraints, and expectations for monetary easing are all fueling a bullish mood in crypto markets, prompting investors to set aside memories of a painful and persistent bear market in 2022.
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