Bitcoin surged again, hitting another all-time high. According to Coin Metrics, the leading cryptocurrency’s price soared 3% to $72,022.16, reaching a peak of $72,750.16. The digital currency experienced a volatile surge, marking new records for the first time since November 2021, followed by relatively calmer trading during the weekend.
The influx of investments into U.S. Bitcoin spot ETFs continues to be a significant driving force behind the crypto’s price momentum. CoinShares reported a record-breaking $2.7 billion inflow into digital assets last week, bringing the total investment to $10.3 billion, approaching the 2021 record of $10.6 billion.
However, increased leverage within the crypto market has led to substantial price fluctuations, reminiscent of levels not seen in almost a year. Funding rates have peaked since 2021, coinciding with Bitcoin’s open interest record high. Ether, Bitcoin’s counterpart, surged past $4,000 for the first time since 2021, buoyed partly by Bitcoin’s performance, with a 3% increase to $4,034.00.
Investors are eagerly anticipating the Ethereum network’s upcoming major technical upgrade, nicknamed “Dencun,” expected this week. Historically, the cryptocurrency has rallied leading up to such upgrades, followed by a sell-off by traders during the event.
Alex Saunders, an analyst from Citi, highlighted the potential divergence in price action during the Dencun upgrade due to the prevailing strength of other significant crypto catalysts, including Bitcoin ETFs’ inflow, the looming Bitcoin halving and the possibility of the U.S. Securities and Exchange Commission approving Ether spot ETF trading by May.
Stocks associated with Bitcoin’s performance showed mixed results on Monday. While Coinbase experienced some gains before settling close to flat, Microstrategy saw a 4% increase following its acquisition of roughly 12,000 Bitcoins for more than $821 million.
However, mining companies faced losses, with Marathon Digital Holdings Inc. (NASDAQ: MARA) dropping 12%, CleanSpark falling 16%, Iris Energy declining by 5% and Riot Platforms slipping by 4%. Despite being top gainers in February, these companies have seen a downturn in March as investors anticipate the upcoming halving event.
Meanwhile, U.K. regulators announced approval for exchanges to list the first crypto-linked ETPs, following the approval of Bitcoin spot ETFs in the U.S. two months ago. The regulator’s decision allows recognized exchanges to establish a U.K.-listed market section for crypto-backed ETNs. The London Stock Exchange will start accepting applications for the admission of Ether and Bitcoin ETNs from April this year.
Unlike ETFs, which are asset-holding funds, ETNs are unsecured debt securities issued by banks, typically linked to market indices or benchmarks. They promise to pay out the full index value at maturity and charge lower management fees. Bitcoin proponents believe this move will drive greater institutional investment into cryptocurrencies, positively impacting prices as more substantial investments flow into the market.
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