Bitcoin Approaches All-Time High Amid Strong ETF Demand
Bitcoin’s Rally Continues With Potential for New All-Time High
Few obstacles seem to be in the way of Bitcoin’s current rally. The largest cryptocurrency rose for the second straight day and marched closer to its all-time high, driven by expectations of exchange-traded funds’ robust demand at the week’s start.
Bitcoin Surpasses $65,000 Mark
The most liquid token rose to as much as $65,010 – its first move above $65,000 since November 2021 — before trimming back to $64,917 as of 8:28 a.m. London.
Bitcoin ETFs Boost Demand
At the heart of this frenzy for the largest crypto token lies seemingly insatiable demand from US-listed Bitcoin ETFs, which began trading on Jan. 11. Bitcoin has jumped about 186% in the last 12 months.
Net inflows of $7.35 billion have been invested since the debut of US Bitcoin ETFs from some of the biggest fund names, including BlackRock Inc. and Fidelity Investments. Even outsize outflows at one notable firm – nearly $9 billion at Grayscale Bitcoin Trust since the ETFs were listed – haven’t swayed traders.
“Given the low liquidity over the weekend, markets are moving north in anticipation that tonight’s ETF inflows will continue and prices will continue to rally,” said Hayden Hughes, co-founder of social-trading platform Alpha Impact.
Record-Breaking Predictions and Bitcoin Halving Expectations
Traders are betting on the price to soon cross the record of almost $69,000, reached during the Covid pandemic in November 2021, given the ETFs’ strong demand and concern of missing out ahead of Bitcoin halving, which is expected in April this year. After halving – when the reward for mining is cut in half – the supply growth of the coin could come down, adding to the demand squeeze.
Altcoins Register Gains
Other tokens known as altcoins, including Cardano and Solana, also were up Monday 8% and 1% respectively.
Meme Coins on the Rise
Small-cap tokens, known as meme coins, also rose on the back of Bitcoin’s rally. Dogecoin was up nearly 20% and Shiba Inu 34% in the last 24 hours.
“This is a situation reminiscent of the 2021 bull run, with retail traders looking to make quick profits from rising prices in very volatile tokens,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.
Positive Outlook In Crypto Derivatives Market
Trading in crypto derivatives, which reflects traders’ positions, also signaled a bullish outlook. Open interest at Chicago-based CME Group’s Bitcoin and Ether futures market is just 1.8% away from their respective record highs. The increase in the number of outstanding contracts is a sign of greater interest in crypto-related exposure and hedging among US institutions.
“The all-time highs in Bitcoin should get tested in the short-term, with the important 70,000 level providing strong resistance,” Mauron said.
Conclusion
The cryptocurrency market, particularly Bitcoin, continues to show resilience and upward momentum fueled by the strong demand for Bitcoin ETFs. As investors look for rapid profit growth, both altcoins and meme coins experience increasing popularity. Optimism in the market is further supported by the rising interest in crypto derivatives, indicating a positive long-term outlook. With the potential for Bitcoin to reach new all-time highs in the near future, traders and investors eagerly await further developments and market fluctuations.
