Bitcoin Soars to Two-Year High, Buoyed by Investment Flow and Market Optimism
Bitcoin surged to a two-year high on Monday, surpassing $65,000 and inching closer to its all-time record. This upswing was fueled by a wave of investment and broader market optimism.
The price reached a session peak of $65,537 early in European trading, exceeding a new two-year high previously established in Asian markets. At the time of writing, Bitcoin was trading at $65,045, reflecting a 4% increase. Its previous record high of $68,999.99 was set in November 2021.
The leading cryptocurrency by market value has witnessed a 50% value increase so far in 2024, with a significant portion of this growth occurring in recent weeks. This coincides with a notable rise in inflows into U.S.-listed Bitcoin funds.
The approval of spot Bitcoin exchange-traded funds (ETFs) in the United States earlier this year paved the way for larger investors to enter the market, reigniting investor enthusiasm and propelling a momentum reminiscent of the 2021 rally.
Analyst Insights:
Markus Thielen, head of research at crypto analytics firm 10x Research in Singapore, attributes the sustained investment flow to growing investor confidence amidst rising Bitcoin prices. He cited data from LSEG indicating that net inflows into the ten largest U.S. spot Bitcoin funds reached $2.17 billion in the week ending March 1, with over half of these inflows directed towards BlackRock’s iShares Bitcoin Trust (IBIT.O).
Ether’s Rise and Confluence with Broader Market:
Ether (ETH), the second-largest cryptocurrency, has also benefitted from the positive sentiment, reaching its own two-year high. It was trading at $3,518 on Monday, reflecting a 2.6% increase for the day.
The Bitcoin rally coincides with record-breaking performances in various stock indices, including Japan’s Nikkei and the U.S.-based S&P 500 and Nasdaq. Additionally, volatility gauges in both equity and foreign exchange markets have shown signs of decline.
Market Comparison and Future Outlook:
Brent Donnelly, a trader and president at analysis firm Spectra Markets, draws a parallel between the current market and the 2021 rally, where all asset classes were experiencing upward trends and investor enthusiasm was high. He states, “In an environment where the Nasdaq is hitting new highs, Bitcoin, as a high-volatility tech proxy and liquidity indicator, is bound to perform well.”
While the future trajectory of the market remains uncertain, the current scenario suggests a return to the “everything is up and everyone is having fun” market sentiment observed in 2021.