Madrid/New York, Mar 13 (EFE).- Bitcoin, the most widely used cryptocurrency, hit a new record of around $73,700 on Wednesday, driven by the upcoming bitcoin halving expected in April and the entry of large fund managers into the market.
According to data from Coin Metrics provided by CNBC, the cryptocurrency reached $73,679 at 08:46 pm GMT before starting a decline.
It bottomed out at $72,000 before rebounding. By 10:00 pm GMT, after Wall Street closed, the price had surpassed $73,200.
This new high broke Tuesday’s record, when it reached $72,992, during a week in which the cryptocurrency has consistently reached new highs, since Mar. 5 when it reached $69,191.9, beating the previous record of $68,991 set on Nov. 10, 2021.
Since Jan. 23, when bitcoin fell to its lowest poit in 2024 ($38,509), the cryptocurrency has risen by more than 90%.
Analysts attribute Bitcoin’s bullish trend to the US Securities and Exchange Commission decision to authorize the creation of exchange-traded funds (ETFs) linked to the cryptocurrency’s price.
The planned “halving” for April, where the reward received by bitcoin “miners” will be halved, reducing the creation of new coins, is also driving bitcoin’s rise.
“Halving” is a change to Bitcoin’s underlying blockchain technology, designed to reduce the rate at which new bitcoins are created.
Bit2Me’s Institutional Training Director, Javier Pastor, highlighted the pace of cryptocurrency purchases, which is around 4,500 bitcoins per day.
In this regard, he assured on Tuesday that BlackRock acquired around $1 billion worth of bitcoins.
“We continue to see sustained buying that is likely to accelerate with the approval of ETFs in Hong Kong and also ETMs in the UK,” Pastor said, adding that the rise in the cryptocurrency’s price is due to the increasing proximity of central bank’s interest rate cuts, the “halving,” and supply shocks.
“This has just begun, and the question we need to ask ourselves is whether it will be different from other cycles where there has been a burst in prices and then a fall of 60%, 70% or more,” he said.
“I believe it probably won’t repeat in the same way, and we’ll see another behavior despite the explosive rise,” he concluded.
Julius Baer’s Digital Assets Analyst, Manuel Villegas, also explained that the reasons behind this bitcoin movement are clear, and is a “frenzied” demand for the cryptocurrency by physically-backed ETFs, fueled by a shallow market.
“The market sentiment seems optimistic, and investors are watching for any signs of exuberance,” added the analyst, who assured that the eleven funds that issued bitcoin ETFs have accumulated more than $59 billion in assets under management, with total net inflows of approximately $11 billion.
Meanwhile, Ethereum, the second largest cryptocurrency on the market, is trading at $3,974.8, close to its all-time high of $4,866.4 reached in November 2021. EFE
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