Bitcoin Hits New Record Above $72,000

(New York) In its wild ride, Bitcoin hit a new record high of more than $72,000 on Monday, with demand for the cryptocurrency jumping on the prospect of lower interest rates in the United States in the coming months.

The price of bitcoin rose to $72,880 in the afternoon in London.

The digital currency has already hit several records last week, smashing the November 2021 one at $68,991.

It closed at $72,115 on Monday, a new closing high.

The new high comes “on the back of a weakening US dollar after a mixed set of US employment data on Friday,” notes James Harte, an analyst at Tickmill.

The US unemployment rate rose to 3.9% in February, the highest level since January 2022.

Strengthening expectations of a U.S. rate cut are weakening the dollar and yields on U.S. Treasuries, rival assets, making bitcoin more attractive relative to investors, notes Neil Wilson, an analyst at Finalto.

And if the U.S. economic outlook remains generally favorable, it’s also possible that the market is “interested in the way debt continues to pile up, particularly in the United States,” prompting it to turn to alternative assets such as gold — which hit a new all-time high high on Friday at $2,195 — or bitcoin, AJ Bell’s Russ Mold estimates.

The price of Bitcoin has jumped around 70% since the beginning of the year, a spectacular rise after the collapse of prices following the collapse of several giants of the sector at the end of 2022.

Green for new financial products

The main cryptocurrency by capitalization, bitcoin, has seen its value climb to new all-time highs in recent days, driven by the authorization of a new type of investment product in the United States last January, an index fund (ETF) that tracks the price of bitcoin.

On Monday, the UK markets watchdog, the FCA, gave the green light for cryptocurrency-backed securities to be listed in the UK, but only for “professional investors”.

For Finalto’s Neil Wilson, the arrival of ETFs in the United States remains a “catalyst” for bitcoin’s price growth because it “means investors have easy access to them.”

As for the recent decision in the UK, it “suggests that cryptocurrency is becoming more widespread, and not just bitcoin – the oldest of them – but also other established cryptocurrencies,” Kathleen Brooks, an analyst at XTB, told AFP.

The market is also anticipating “halving,” a technical phenomenon that involves halving the reward given to Bitcoin “miners” — those who contribute to the creation of blockchain blocks by verifying transactions.

The “halving” takes place approximately every four years, and the next one is due in April.

The event should “reduce the supply” of bitcoins available for purchase, which explains why bitcoin’s value has strengthened, according to City Index’s Fiona Cincotta, interviewed by AFP.

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