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Monday November 29, 2021

Bitcoin hits record above $66,000 on Wall Street debut

By AFP
October 21, 2021

London: Bitcoin struck a record high Wednesday, a day after taking another step towards mainstream status as the world´s most popular cryptocurrency forayed onto Wall Street.

Bitcoin soared above $66,000 and nearly hit $67,000 a day after a financial instrument dedicated to the unit made its debut on the New York Stock Exchange.

The Bitcoin Strategy ETF, a new exchange-traded fund linked to bitcoin futures rather than directly to the currency, rose nearly five percent in its first day of trading on Tuesday.

The fund should be a more accessible vehicle for mainstream investors, and could therefore boost trading in the cryptocurrency.

"Interest in bitcoin in the wake of yesterday´s new ETF launch has helped to push the cryptocurrency to a new record high," said CMC Markets analyst Michael Hewson.

Known for its volatility -- bitcoin lost

half of its value after setting its previous record high in April -- it has now gained more than 50 percent over the last month and an astonishing 450 percent over the past year.

This week´s stellar gains have also sparked talk of hitting $100,000 in the coming months.

The virtual unit, created 13 years ago and long regarded as the preserve of internet geeks and hobbyists, has been embraced by many major banks.

The new fund is a more accessible vehicle that puts bitcoin within the grasp of even more investors.

'Taking to next level'

"Interest in bitcoin in the wake of yesterday´s new ETF launch has helped to push the cryptocurrency to a new record high," said CMC Markets analyst Michael Hewson.

"Bitcoin is more or less mainstream already with various banks offering clients exposure to it.

"This merely takes it to the next level," he told AFP.

The Bitcoin Strategy ETF rose nearly five percent in its first day of trading on Tuesday.

Bitcoin itself has now gained more than 50 percent over the last month -- and an astonishing 450 percent over the past year.

This week´s stellar gains have also sparked talk of hitting $100,000 in the coming months.

"The party is on," summarised AvaTrade analyst Naeem Aslam.

"The fact is that this is only a beginning as investors.

"Given the price momentum we are seeing on the back of bitcoin´s ETF, we believe that bitcoin can easily go all the way to $100,000 by the end of this year."

'Speculative and volatile'

Investors should however remain cautious over the volatile unit, Oanda analyst Craig Erlam told AFP.

"The ETF is an incredibly important move to getting mainstream investors on board," said Erlam.

"That is not to say there will suddenly be a pile into bitcoin -- it´s still a highly speculative and volatile instrument.

"But it´s a step in the right direction for an asset class that´s craving institutional acceptance."

The unit had hit its prior record of $64,870 in April, ahead of the Nasdaq debut of cryptocurrency exchange Coinbase -- but plunged in May on Chinese regulatory concerns.

China has cracked down on trading and mining cryptocurrencies, which are created through solving complex equations -- an endeavour that consumes enormous amounts of energy.

Bitcoin was meanwhile buoyed in September after it became legal tender in El Salvador in a world first.

Many central banks remain sceptical over bitcoin because of its shadowy nature and the fact that it remains unregulated, while criminals have in the past been attracted to its under-the-radar appeal.

´Big step for cryptos´

The new Wall Street fund could help address those concerns, according to XTB analyst Walid Koudmani.

The ETF "is a big step for cryptos overall since it opens the possibility for many traditional investors who were reluctant to enter the market due to associated risks such as lack of regulation and the underlying security risks", he said.

"This, along with the increasing media interest in the crypto space, could boost demand and bring a new wave of liquidity in the markets which could ultimately push prices to new highs."