Key Points
- Bitcoin (BTC) price hits a new all-time high of over $69,200 on March 5.
- This surge follows significant inflows from new spot Bitcoin exchange-traded funds (ETFs) in the US.
Bitcoin's value soared to an unprecedented high of over $69,200 on March 5, marking a 5% increase within the last 24 hours.
This surge in the value of the world's first cryptocurrency signifies a 21% rally within the past week, breaking the previous record of $68,990. This previous high was recorded on the Coinbase exchange on November 10, 2021.
Role of Bitcoin ETFs
The record-breaking price rise is attributed to substantial inflows from the newly introduced spot Bitcoin ETFs in the United States. These ETFs have created a passive, price-agnostic demand for Bitcoin thereby strengthening its position as a store of value and contributing to its price appreciation.
A research report by Bitfinex analysts predicts a conservative price target of $100,000-$120,000 by Q4 2024, and the peak of the cycle to be reached sometime in 2025 in terms of total crypto market capitalization.
The introduction of spot ETFs could potentially reduce Bitcoin's downside volatility after reaching new cycle tops. This effect was seen in the price of gold after the launch of gold ETFs.
Bitcoin ETFs and Market Impact
Bitcoin ETFs have played a significant role in the current rally. As of now, Bitcoin ETFs account for approximately 75% of the new investment in the world's largest cryptocurrency, surpassing the $50,000 mark on February 15, according to research by CryptoQuant.
A research report dated February 26 predicts that Bitcoin ETFs could surpass gold ETFs in assets under management (AUM) within the next two years. This report was shared by Eric Balchunas, a senior Bloomberg analyst, and associate analyst Andre Yapp.
Despite the new all-time high, Bitcoin could experience considerable volatility after the halving, as per Paul Eisma, head of options trading at XBTO Futures. He states that the crypto ecosystem will face simultaneous pressure from the halving's deflationary supply impact and the ongoing demand shock from the ETFs.
The options market December 2024 at-the-money forward break-evens are currently pricing in a range of $55,000–$85,000 with implied volatility around 65%.
The future of crypto might see Ether ETFs through Keyrock's perspective.
