Bitcoin’s Record-Breaking Run
Bitcoin has reached a new milestone, surpassing $71,000 and solidifying its position as the digital equivalent of gold. It has also surpassed the market capitalization of silver.
Since early March, Bitcoin has been setting new all-time highs with remarkable frequency. Today, it reached a peak of $72,750, representing a 5% daily increase and a 12% gain over the past week. This consistent climb highlights Bitcoin’s relentless rise in the financial world.
UK Regulatory Approval Boosts Bitcoin
Amidst the UK financial regulator’s announcement that it would allow trading of cryptocurrency-backed securities, Bitcoin surged to a new all-time high of nearly $73,000. This move erased its previous peak of $69,000 set in November 2021.
The Financial Conduct Authority (FCA) stated that it would not object to investment exchanges establishing a market for cryptoasset-backed exchange traded notes (cETNs) on the UK list.
Bitcoin’s Rise to Prominence
Bitcoin’s recent surge comes just months after it surpassed Tesla, Meta, and Berkshire Hathaway in market capitalization, becoming the eighth-largest asset globally. While it still trails industry giants like Microsoft, Apple, and Amazon, Bitcoin’s rise has been nothing short of spectacular.
FCA’s Cautionary Stance
Despite its approval of cryptoasset-backed securities, the FCA maintains its stance that cryptoassets are largely unregulated and “high-risk investments.” The regulator warns investors to be prepared for the potential loss of their entire capital.
Bitcoin ETF Frenzy
The surge in US spot Bitcoin ETF inflows has been a key driver of cryptocurrency price dynamics. CoinShares reports record-breaking weekly inflows of $2.7 billion, bringing the year-to-date total to $10 billion. This is approaching the 2021 annual record of nearly $11 billion.
Bitcoin Halving on the Horizon
Another catalyst for Bitcoin’s bullish upswing is the upcoming halving, which NiceHash estimates will occur in approximately 35 days. This event, which has happened three times before, involves a reduction in the reward given to Bitcoin miners for processing new blocks on the network. The reward will decrease from 6.25 BTC to 2.125 BTC, further reducing the supply of new coins.
This scarcity-driven paradigm, similar to the scarcity of gold, has long been considered a fundamental component of Bitcoin’s value trajectory. By reducing the supply of new Bitcoin, the halving strengthens its allure as a store of value in the digital age.
