2024-02-28 16:15:37
Bitcoin storms past the $60,000 mark
The euphoria in the crypto market is causing the Bitcoin price to explode. He has gained almost 40 percent since the beginning of the year.
“Extreme greed”: At the beginning of the year, the US Securities and Exchange Commission approved an exchange-traded fund for the cryptocurrency Bitcoin for the first time.
Foto: Jakub Porzycki (NurPhoto, Getty Images)
The Bitcoin price has climbed above $60,000 for the first time in more than two years. In November 2021 it reached its all-time high of almost 69,000. It then collapsed by more than 60 percent in 2022 following a series of scandals involving fraud and stock market bankruptcies.
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In the wake of Bitcoin, other cryptocurrencies are being pushed up. Ether, the second largest, has already gained more than 40 percent in value since the beginning of the year.
The course fireworks are powered by the Approval of the first Bitcoin ETF for trading in the USA by the US Securities and Exchange Commission (SEC) on January 10th. Exchange Traded Funds (ETF) are securities that are traded like stocks on a stock exchange.
With Bitcoin ETFs from providers such as Blackrock or Fidelity, investors can easily invest in the cryptocurrency. In the first eight weeks, more than $13 billion flowed into the new investment vehicles.
These are probably not just investors who have recently invested in Bitcoins. A significant portion of these were shifts from more expensive or less convenient Bitcoin holding options.
The largest of the new ETFs, GBTC, has seen significant net outflows every day since launch, totaling around $7.3 billion as of earlier this week. The asset manager Grayscale had previously held its customers’ Bitcoins in a trust; the fees were high and the shares could not be easily sold. Now many customers are selling or switching to cheaper providers.
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With its approval in the USA, Bitcoin has overcome another hurdle on the way to wider acceptance. That is not the only reason for the price increase.
The euphoria surrounding Bitcoin is further fueled by speculation about the effects of the next so-called Bitcoin halving, which is expected for mid-April. The compensation for checking and adding a block to the blockchain is halved. This means there will be fewer new Bitcoins coming onto the market from April onwards, which could have a price-increasing effect.
The mood in the crypto market has been constantly switching between “greed” and “extreme greed” since January, as can be seen in the “Crypto Fear and Greed Index,” which is calculated based on Google Trends, surveys, market volatility and other indicators.
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Many Bitcoin fans are so convinced of the cryptocurrency that they never sell, no matter how high the price rises. These voices are very loud on social media. According to estimates, around 80 percent of the Bitcoin supply has not changed hands in the last six months. The fact that only a small proportion of the total amount of Bitcoin is actually traded limits the supply. Any additional demand then has a price-increasing effect.
Update from February 28, 2024 at 4 p.m.: The article has been updated and revised with developments over the last few days.
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