News
Bitcoin Nears $70,000, Its Second All-Time High This Week, Then Quickly Falters
Key points
- Bitcoin hit $70,000, its second all-time high this week, before swinging rapidly between losses and gains.
- Demand for bitcoin, driven by spot bitcoin ETFs, is likely pushing up its price.
- A rate cut by the Fed could help make bitcoin more attractive, given the decline in Treasury yields.
- Ether (ETH) came within a hair’s breadth of $4,000 before falling further.
Bitcoin (BTC) hit another record high on Friday, briefly touching $70,000 on Coinbase before plunging back below $67,000 and then bouncing back above $68,000. It was the second all-time high and subsequent fumble this week for the largest cryptocurrency by market cap.
Bitcoin is on a rebound this year, as billions of dollars have flowed into spot bitcoin ETFs after the SEC approved 11 such funds in January. Investors are also anticipating an imminent halvinga major event that usually causes the price of bitcoin to increase.
Given the large inflows into Bitcoin ETFs, analysts at Deutsche Bank say that “the cryptocurrency space is gradually moving towards greater institutionalization, as traditional financial players enter the market.”
The bank also expects risk appetite to increase when the Federal Reserve begins cutting interest rates.
“More investors are likely to seek out high-yielding alternative assets as Treasury yields decline,” Deutsche Bank’s Marion Laboure and Cassidy Ainsworth-Grace wrote in a March 7 note. “This flow of capital into non-traditional asset classes like cryptocurrencies could further support an ongoing rally in digital currency prices.”
And bitcoin wasn’t the only cryptocurrency on the rise. Ether (ETH) came within a hair’s breadth of $4,000 on Friday, before starting to slide.