The price of Bitcoin is close to reaching its highest price, as it is currently at $60,000
Wednesday saw the passing of the $60,000 threshold for Bitcoin, bringing it closer to its peak and continuing its unchecked ascent since the adoption of a new kind of investment that is correlated with the cryptocurrency.
Bitcoin price reaches $60,000
Bitcoin was trading at almost $60,301 at 13:25 GMT, getting closer to its all-time high of $68,991, which was reached in November 2021 and is, according to some analysts, currently achievable.
Exchange-traded funds (ETFs) linked to bitcoin have been approved by US securities authorities on January 10. This means that, in theory, a larger audience may now invest in the cryptocurrency without having to own it personally. Nonetheless, the funds themselves make investments in virtual money.
The price of the new investment product had risen in previous months due to expectations of approval, but it had mostly dropped by the end of 2022 as a result of the collapse of numerous major cryptocurrency companies.
According to Mikkel Morch of specialized fund ARK36, the introduction of exchange-traded funds, or ETFs, in the US has "injected a fresh wave of optimism, propelling trading volumes and spotlighting crypto-linked firms."
From an accessibility perspective, the products are similar to equities or mutual funds for regular investors.
Following the fund's conversion into an ETF, a wave of large withdrawals from the GBTC (Grayscale Bitcoin Trust) fund was originally caused by some investors seeking to recover their losses.
However, once the selling frenzy passed, money started flowing into US bitcoin ETFs, including the one run by the massive asset management company BlackRock.
Since the beginning of the year, exchange-listed investment products tied to cryptoassets have drawn almost $5.7 billion, according to figures released on Monday by asset management CoinShares.
Software company MicroStrategy claimed on Monday that it had bought an additional 3,000 bitcoins, which were then valued at $155 million, as more proof of "the growing institutional endorsement that's fuelling this rally" in prices, according to Morch.
With this transaction, their total bitcoin holdings increased to 193,000 (or around $6.09 billion).
When powerful computers solve challenging puzzles to confirm transactions recorded on the blockchain, Bitcoin is generated, or "mined."
Tickmill analyst James Harte observes that prices are also supported by large industry participants purchasing bitcoin before the "halving," or splitting of the payout for the token's miners in half.
The next due date for the about every four-year occurrence is in April.
It is anticipated to decrease the rate at which new bitcoins are introduced to the market, hence decreasing the amount of bitcoins that might be bought, thus increasing its value.
According to Nigel Green, head of financial advice company deVere Group, "when the issuance of new bitcoin slows down, the existing scarcity of the digital asset becomes even more pronounced, typically leading to increased demand and, subsequently, higher prices."
He went on, saying, "Cryptocurrencies are still very speculative, but the huge demand for spot ETFs and the impending halving event should keep the current momentum going, which could push bitcoin over $69,000."
The expectation that the US Federal Reserve would begin to reduce interest rates this year as inflation starts to decline has also helped the virtual unit.
