Bitcoin has surged to a fresh all-time high, marking a milestone unseen in over two years, propelled by this year’s fervent rally fueled by excitement surrounding bitcoin exchange-traded funds and the imminent halving event.
The cryptocurrency’s price soared to over $69,210 on Tuesday morning before retracing, as reported by Coin Metrics. However, it currently trades lower by 10% at $60,793.80. Bitcoin had previously hit its peak at $68,982.20 on November 10, 2021, a milestone reached approximately a year before the crypto industry faced a significant setback with the catastrophic collapse of FTX, dubbed by some as crypto’s “Lehman Brothers moment.”
“Bitcoin reclaiming its all-time high yet again shows it is never going away,” remarked Alex Thorn, head of research at Galaxy Digital, emphasizing the resilience of the cryptocurrency over its 15-year existence. “In its 15 years of existence, bitcoin has seen four 75% [plus] drawdowns, and each time it has come roaring back.”
Echoing this sentiment, Clara Medalie, research director at crypto data provider Kaiko, highlighted the significance of the new record as an “important psychological milestone” demonstrating crypto’s ability to rebound despite significant challenges. However, she noted that it doesn’t have a substantial impact on the industry’s innovation pace.
“Bitcoin becomes more useful as it grows more valuable,” Thorn added, stressing the cryptocurrency’s increasing utility with its rising market cap and reduced volatility over time.
Since the beginning of February, several key narratives have driven bitcoin’s price surge, including the commencement of trading for U.S. spot bitcoin ETFs and anticipation surrounding the upcoming halving event scheduled for late April, designed to introduce scarcity to the asset.
The achievement of a new all-time high represents a triumph for an industry previously plagued by reputational and regulatory risks, notably highlighted by the collapse of FTX and other crypto lenders just two years ago. Bitcoin’s resilience is evident, having faced skepticism and comparisons to historical bubbles like the “tulip mania.”
According to Thorn, retail interest could see a resurgence in the crypto market following this milestone, driven by momentum and the allure of all-time highs, potentially leading to increased capital inflows into alternative cryptocurrencies.
Bitcoin’s remarkable recovery in 2023, marked by a 157% surge, was fueled initially by the regional banking crisis in the U.S. and speculation surrounding the approval of bitcoin ETFs by the U.S. Securities and Exchange Commission.
Despite the skepticism surrounding the valuation and intrinsic value of cryptocurrencies, the legitimacy brought by U.S. spot bitcoin ETFs has garnered significant attention and investment, with BlackRock’s iShares Bitcoin Trust (IBIT) surpassing $10 billion in assets under management.
However, caution is advised for investors entering the market at current levels, as unrealized profit margins approach extreme levels, with potential steep corrections looming ahead, warned industry experts like Ed Tolson, CEO and founder of crypto hedge fund Kbit, and Owen Lau from Oppenheimer.
While acknowledging the potential for short-term corrections, Lau remains optimistic about the long-term outlook, emphasizing the continued presence of catalysts supporting positive price action for Bitcoin.
