Category: Cryptocurrency

Bitcoin tops $71,000 for the first time as rally builds steam

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin topped $71,000 for the first time, advancing for a sixth straight day and taking this year’s rally to almost 70% on the back of massive inflows into US exchange-traded funds.

The original cryptocurrency jumped as much as 3.2% to $71,631.45 on Monday. Smaller tokens like Ether, Solana and Avalanche also advanced.

“This rally comes following a weak Asian trading session in which shorts tested the conviction of longs — it appears the longs have given a rather convincing positive answer,” said Richard Galvin, founder of Australia-based crypto-focused investment firm DACM.

Investors have poured a net almost $10 billion into a batch of new Bitcoin ETFs since they launched in the US two months ago, igniting a broad surge in crypto markets. Digital assets scored another win on Monday, as the London Stock Exchange confirmed it will accept applications for admitting Bitcoin and Ether exchange-traded notes.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold steady after surging to record on rate-cut bets, haven bids

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold steadied after surging to a record high in the previous session, boosted by expectations for US rate cuts, geopolitical tensions and the risk of a pullback for equity markets.

Bullion rose to a peak of $2,141.79 an ounce on Tuesday, surpassing the previous high set in early December. The precious metal has climbed almost 5% over the last five sessions.

Gold’s ascent has taken some in the market by surprise, particularly since there hasn’t been any major change in expectations for when the Federal Reserve will lower borrowing costs. Swaps markets show a 62% chance of a cut in June, compared with 58% at the end of February. Lower rates are typically positive for bullion, which doesn’t offer any interest.

“The velocity and the speed was very sudden, very fast,” said James Steel, an analyst at HSBC Holdings Plc. “It didn’t seem to have a smoking gun.”

Beyond rates, other factors have contributed to gold’s strength. Macro funds, which haven’t been active in the market until recently, were a new force of buying. Bullion’s role as a haven asset is also being aided by elevated Middle East tensions and disruptions to global shipping, China’s persistent economic woes and the US presidential election at the end of the year.

The risk of a US stock market correction — flagged by weak manufacturing data on Friday — may have persuaded some investors to move out of equities and into gold, said Ole Hansen, a commodity strategist at Saxo Bank A/S.

Spot gold declined 0.1% to $2,127.03 an ounce as of 9 a.m. in Singapore. The Bloomberg Dollar Spot Index rose 0.1%. Silver edged higher, while platinum and palladium were flat.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin retreats after record-setting run that topped $69,000

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin surged to a record for the first time in more than two years, yet the original cryptocurrency didn’t stay at its new all-time high very long as many traders appear to have taken the opportunity to book some profit.

The token jumped as much as 2.5% to $69,191.95 shortly after 10 a.m. in New York, then almost immediately reversed course in a plunge that at one point sent it 14% below the record to $59,317.16.

“Given that nearly everyone who has ever bought Bitcoin is now in profit, there are decent odds we see some amount of profit taking,” said Zaheer Ebtikar, founder of crypto fund Split Capital.

The volatile price swings on Tuesday were the latest example of the boom-or-bust nature of Bitcoin. Its recent gains had been amplified by bullish bets made in the derivatives market, where investors in the past could get leverage of as much as 100 times the size of their positions in products such as perpetual futures. With Bitcoin reversing its early gains, more than $800 million worth of bullish positions were quickly liquidated in the perpetual futures market, according to crypto data tracker Coinglass.

Bitcoin has experienced a breathtaking rebound this year amid strong demand from new US exchange-traded funds and a looming reduction in growth of the token’s supply. At its high on Tuesday, Bitcoin was up about 63% so far in 2024, outperforming global stocks and spreading optimism across the digital-asset market. ”

In an ironic twist, Bitcoin owes much of its resurgence to a regulator long-viewed as hostile to crypto: the US Securities and Exchange Commission. The SEC approved spot-Bitcoin exchange-traded funds in early January after suffering a legal defeat last year in its attempt to reject them. The move has widened the mass-market accessibility of Bitcoin, helping the crypto sector to turn the page following a bear market in 2022 and a string of subsequent bankruptcies, including the implosion of Sam Bankman-Fried’s FTX exchange.

A steady tide of money has poured into the ETFs issued by investment heavyweights including BlackRock Inc. and Fidelity Investments. The net inflow of almost $8 billion in less than two months is colliding with a looming reduction in Bitcoin’s supply growth — known as the halving — that is also stoking bullish sentiment.

“Breaking all-time highs, with the current momentum in spot ETFs as well as the upcoming halving narrative, would likely awaken true FOMO — fear of missing out — among participants currently watching markets from the sidelines,” said Stefan von Haenisch, head of trading at OSL SG Pte.

The comeback in Bitcoin that started in early 2023 has lifted the overall market value of digital assets to about $2.6 trillion. Its revival from a low in November 2022 caps a bust-to-boom cycle that left the industry it spawned irrevocably changed.

Bitcoin hit its previous peak of $68,991.85 on Nov. 10, 2021, according to data compiled by Bloomberg, powered by the monetary and fiscal stimulus that governments around the world deployed to tackle the impact of Covid-19. The rally was driven partly by crypto purists known for their mantra of “HODL,” the result of a misspelling of “hold” that’s been adopted as an acronym for “hold on for dear life.”

Reckoning in 2022

What was hailed by some as crypto’s ultimate coming-of-age moment back then instead turned out to be the start of a brutal reckoning.

Soon after touching its high in 2021, Bitcoin — and wider crypto markets — began a precipitous descent as central banks turned hawkish to fight runaway inflation. By the end of 2021, Bitcoin’s price had tumbled by almost a third from its peak.

The bear market exposed widespread fraud and reckless risk-taking among many of crypto’s key players, embodied by the implosion of the TerraUSD stablecoin and the collapse of Bankman-Fried’s FTX exchange and related companies. Binance, the largest digital-asset exchange, and its founder Changpeng “CZ” Zhao also came under increased regulatory scrutiny.

Bankman-Fried and Zhao are now awaiting sentencing in the US on criminal charges. TerraUSD creator Do Kwon, who was imprisoned in Montenegro last year for traveling with a fake passport, is fighting extradition to the US, where he’s wanted on fraud charges.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin breaches $64,000 briefly as ETF demand lures traders

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin rose for the second straight day and marched closer to its all-time high, driven by expectations of exchange-traded funds’ robust demand at the week’s start.

The most liquid cryptocurrency rose to as much as $64,279 – its first move above $64,000 since November 2021 — before trimming back to $63,622 as of 9:20 AM in Singapore.

At the heart of this frenzy lies seemingly insatiable demand for the largest crypto token from the US-listed Bitcoin ETFs, which began trading on January 11. Bitcoin has jumped about 186% in the last 12 months.

“Given the low liquidity over the weekend, markets are moving north in anticipation that tonight’s ETF inflows will continue and prices will continue to rally,” said Hayden Hughes, co-founder of social-trading platform Alpha Impact.

Net inflows of $7.35 billion have been invested since the debut of the US Bitcoin ETFs, offered by a batch of funds including BlackRock Inc. and Fidelity Investments.

Traders are betting on the price to soon cross the record of almost $69,000, reached during the Covid pandemic, given the ETFs’ strong demand and concern of missing out ahead of Bitcoin halving, which is expected later this year. After halving — when the reward for mining is cut in half — the supply growth of the coin could come down, adding to the demand squeeze.

“Crossing the psychological threshold of Bitcoin’s previous all-time high may take time, but it should only be considered a matter of time until we cross that level given the halving and positive sentiment,” Hughes said.

Other relatively small tokens, including Ether and Solana, also were up Monday 0.15% and 1.82% respectively.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin surpasses $60,000 as demand from ETFs triggers bull run

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand.

The surge in demand for the cryptocurrency that’s resulting from new exchange-traded funds is vastly outstripping the amount of Bitcoin that long-time holders are willing to sell. That’s what lit the match that has set the crypto market on fire, with fuel being added from traders chasing the upward momentum, covering short positions and loading up on leveraged bets that the bull run will continue.

It all culminated in a wild session for the cryptocurrency market on Wednesday, with Bitcoin jumping as much as 13% to $63,968 — its first trip above $60,000 since November 2021 — before it pared gains as a surge in traffic triggered trading outages and displays of $0 balances for users of Coinbase, the largest US digital-asset exchange.

Bitcoin has jumped about 40% already this year, triggered mostly by the successful launch of US exchange-traded funds holding the coins which have attracted more than $6 billion since they began trading on January 11. Bitcoin last traded at $60,000 in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand.
The surge in demand for the cryptocurrency that’s resulting from new exchange-traded funds is vastly outstripping the amount of Bitcoin that long-time holders are willing to sell. That’s what lit the match that has set the crypto market on fire, with fuel being added from traders chasing the upward momentum, covering short positions and loading up on leveraged bets that the bull run will continue.

It all culminated in a wild session for the cryptocurrency market on Wednesday, with Bitcoin jumping as much as 13% to $63,968 — its first trip above $60,000 since November 2021 — before it pared gains as a surge in traffic triggered trading outages and displays of $0 balances for users of Coinbase, the largest US digital-asset exchange.

Bitcoin has jumped about 40% already this year, triggered mostly by the successful launch of US exchange-traded funds holding the coins which have attracted more than $6 billion since they began trading Jan. 11. Bitcoin last traded at $60,000 in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

“We are starting to see a pretty clear FOMO kind of rally,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “More and more people are just convinced to buy.”

Bitcoin’s trading volume surged to more than $79 billion, or by almost 60% in the past 24 hours, according to data from CoinMarketCap.com. As the original cryptocurrency went higher and higher, Coinbase Global Inc. began experiencing what CEO Brian Armstrong referred to on the social-media platform X as a “LARGE surge of traffic.” The exchange reported that some users were experiencing errors when attempting to buy or sell and that some may see a zero balance in their accounts. “Your assets are safe,” Coinbase said on its website, later adding that activity had begun to normalize.

The intense rally has Bitcoin on pace for its biggest monthly gain since December 2020, when the digital token jumped 50% to around $9,600.

Bitcoin has more than tripled in value since the start of last year, climbing back from a 64% plunge in 2022, in a remarkable comeback from a series of crypto-industry scandals and bankruptcies that had raised questions about the viability of digital assets.

Digital tokens are jumping even though investors have pared back expectations for looser monetary policy this year, evidenced by a rise in US Treasury yields. Bitcoin has outperformed traditional assets like stocks and gold in 2024.

“This reversal is all the more impressive in the light of central banks signaling they intend to keep rates high a while longer, eroding the theory that the next crypto bull would be driven by dropping interest rates,” said Michael Safai, co-founder at quantitative trading firm Dexterity Capital.

The massive inflows into Bitcoin ETFs have prompted some industry watchers to warn of a looming supply squeeze as new coins from miners can’t keep up with demand. Some 80% of Bitcoin’s supply hasn’t changed hands in the past six months, potentially exacerbating the squeeze and adding to the upward price pressure, analysts have said.

The nine new spot ETFs have more than 300,000 Bitcoin, or seven times the amount of new coins mined since Jan. 11. After the halving, expected in late April, the number of new coins mined daily will decline to 450 from 900 currently. If this demand stays constant, with supply of new coins cut in half, advocates are predicting that the price has room to rally.

“All of this combined makes for a supply and demand imbalance,” said Dan Slavin, founder of Chainview Capital, a crypto hedge fund. “More demand than supply means price higher, and with BTC price volatility, price higher doesn’t mean 10%, it means a whole lot more.”

The speed of the rally has some observers warning that it leaves investors susceptible to the boom and bust cycles that have become emblematic of crypto.

“This move has been very sharp, leverage is very high at the moment, as implied by derivatives basis and funding rates, so I would not be surprised by a sharp correction” or 20% or more, said Jaime Baeza, founder at crypto hedge fund AnB Investments. “Nonetheless I would not be shorting into this rally while it continues to move at this pace.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FTX founder Sam Bankman-Fried suggests sentence of 63 to 78 months in $8 billion fraud

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sam Bankman-Fried’s lawyer urged a judge on Tuesday to impose a lenient sentence for the FTX founder’s conviction for stealing $8 billion from customers of the now-bankrupt cryptocurrency exchange, arguing clients would get most of their funds back.

In a sentencing submission, Bankman-Fried‘s lawyer Marc Mukasey told US District Judge Lewis Kaplan that a guidelines range between 5-1/4 and 6-1/2 years would be an appropriate prison term.

That is far less than the maximum sentence of 110 years he faces after a jury found him guilty in November on seven counts of fraud and conspiracy, in what prosecutors have called one of the biggest financial frauds in American history.

Bankman-Fried pleaded not guilty and is expected to appeal his conviction and sentence. He acknowledged making mistakes running FTX, but testified at trial that he never intended to steal customer funds.

Kaplan is set to sentence the former billionaire, who turns 32 next week, on March 28.

The lawyer’s submission was accompanied by letters of support from Bankman-Fried’s parents, psychiatrist, and others.

His parents, the Stanford law professors Joseph Bankman and Barbara Fried, said their son was uninterested in material wealth and worked hard to make customers whole in the month between Bahamas-based FTX’s November 2022 collapse and his arrest on fraud charges a month later.

“Barbara and I…witnessed firsthand his single-minded focus on getting money back to depositors, long after there was any possibility he would be able to save any of his equity or wealth,” Bankman wrote.

Mukasey called a 100-year guidelines range calculated by probation officers “barbaric”, saying it was based partly on a faulty assertion that FTX’s customers lost billions.

He pointed to the bankrupt company’s recent assertion that it expected to repay all customers in full to back up the argument that Bankman-Fried did not set out to steal.

“The conviction does not address whether Sam intended to pay the money back. He did,” Mukasey wrote.

The probation officers’ calculation is not binding on Kaplan. The US Attorney’s office in Manhattan is expected to make its own sentencing recommendation by March 15.

Elizabeth Holmes or Michael Milken?

A graduate of the Massachusetts Institute of Technology, Bankman-Fried rode a boom in the values of digital assets such as bitcoin to a net worth Forbes magazine once estimated at $26 billion. His fortune evaporated in November 2022, when FTX declared bankruptcy after a wave of customer withdrawals.

At his month-long trial in Manhattan federal court, three former close associates testified that Bankman-Fried directed them to help loot FTX customer funds to plug losses at his Alameda Research hedge fund, even while presenting himself publicly as a responsible steward in the volatile cryptocurrency market.

Prosecutors said Bankman-Fried also used customer funds to buy luxury real estate in the Bahamas and to donate to US politicians who might support cryptocurrency-friendly regulations.

Bankman-Fried testified that he did not realize how much Alameda owed to FTX until shortly before both failed.

Mukasey acknowledged Bankman-Fried’s case bore some similarities to that of Elizabeth Holmes, another young entrepreneur who was sentenced to 11 years in prison in 2022 for defrauding investors in her now-defunct blood-testing startup Theranos.

But he said Holmes put patients at risk, and suggested Bankman-Fried had more in common with Michael Milken – a Wall Street financier in the 1980s known as the “junk bond king” who was released from prison after serving just two years of an initial 10-year sentence on fraud charges.

“Given the same chance, Sam would dedicate his post-prison life to charitable works,” Mukasey wrote.

Mother says she would change places

Bankman-Fried has been jailed at Brooklyn’s Metropolitan Detention Center since August, when Kaplan revoked his bail after finding that he likely tampered with witnesses.

In a letter to Kaplan, Bankman-Fried’s psychiatrist George Lerner wrote that he is on the autism spectrum. Mukasey wrote that Bankman-Fried struggles to make eye contact and communicate with others, which could leave him vulnerable in a prison setting.

Bankman-Fried’s mother wrote that her son had taken responsibility for the errors that led to FTX’s collapse and was remorseful, but said she feared for his life in prison.

“His father and I face the very real possibility that we will not live long enough to see him freed,” Fried wrote. “I would gladly change places with him if I could.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Grayscale’s Bitcoin ETF exodus reaches $7.4 billion in first 30 trading days

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The world’s biggest Bitcoin ETF has reached an inauspicious milestone: an entire month of consecutive outflows.

The $22.8 billion Grayscale Bitcoin Trust (ticker GBTC) has seen $7.4 billion exit across 30 trading days as of Friday, Bloomberg data show. GBTC has yet to post a single inflow since it converted into an ETF in mid-January.

That stands in contrast to the other nine freshly launched spot Bitcoin ETFs, all of which are sitting on net inflows since trading began. A few different factors explain the dichotomy: while GBTC is by far the largest and most actively traded of its peers, its 1.5% management fee means that it’s also the most expensive offering, with the bulk of its peers charging below 0.3%. Additionally, bankrupt estates such as Genesis Global Holdco LLC have been looking to offload their holdings.

But even with those caveats — including that GBTC didn’t allow for redemptions in its prior structure — it’s surprisingly to see how consistent the outflows have been, according to Vident Asset Management.

“Most of us in the industry expected to see outflows, we all knew it was coming — these long-term holders that were waiting for the fund to finally convert to get out,” said Amrita Nandakumar, president of Vident Asset Management. “Does it go to 60 days? I don’t think so, but then again, I’m surprised to see it got to thirty.”

To be sure, outflows have slowed in recent days, with just $44 million leaving the fund on Friday versus as much as $640 million in January. But even still, GBTC’s $7.4 billion year-to-date outflow is the second largest among more than 3,400 US-listed ETFs.

“The Grayscale team anticipated GBTC’s diverse shareholder base would engage in profit-taking and deploy investment strategies that would impact the Trust’s flows, and we are pleased that outflows have continued to stabilize – especially against forced selling from estate bankruptcies,” a Grayscale spokesperson said in an email. “With market-leading liquidity, strong trading volume, and an unparalleled track record, we expect GBTC will continue to be a primary capital markets risk transfer tool for Bitcoin.”

While GBTC continues to shed assets, the other nine spot Bitcoin ETFs that launched in January are pulling in billions amid the cryptocurrency’s rally. BlackRock and Fidelity are leading the way, attracting nearly $6 billion and $4 billion a piece, followed by the likes of Ark Invest and Bitwise.

Still, GBTC has a loyal following among a population of cryptocurrency advocates for triumphing over the Securities and Exchange Commission. A judge’s ruling in August that the agency acted “capriciously” in barring Grayscale’s conversion to an ETF was a key step leading to last month’s launches. It’s that brand of investor who would likely look past GBTC’s relatively high fee, according to Nandakumar.

“A non-traditional ETF investor who has a lot of brand loyalty to Grayscale, appreciate that they ‘stand for’ — standing up to the SEC and ‘getting it done,’ maybe they would be inclined to invest because they have a brand affinity to Grayscale,” Nandakumar said.

The GBTC share price has jumped 40% so far this year, compared with an increase of around 45% for Bitcoin. The largest digital currency traded at a more than two-year high of around $54,570 on Monday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin breaks from recent range to set more than two-year high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin rose to the highest in more than two years, climbing above $54,000, amid growing optimism that persistent investor demand through exchange-traded funds will drive the price of the largest cryptocurrency back to record levels.

“Bitcoin continues its ascent, supported by strong ETF inflows,” said Spencer Hallarn, global head of over-the-counter trading at crypto investment firm GSR.

The original digital currency increased as much as 5.2% to $54,438 after trading in a narrow range for more than a week. It last traded at this level in December 2021, and reached an all-time high of almost $69,000 the prior month.

Investors have poured more than $5 billion into nine ETFs that began trading last month. That figure takes into account the $7.4 billion that has been withdrawn during the same period from the Grayscale Bitcoin Trust, which was converted from a trust.

“Bitcoin is approaching new yearly highs off the back of increased spot demand and momentum traders taking positions off the back of a breakout after a week of consolidation,” said Chris Newhouse, a DeFi analyst at Cumberland Labs. “Interestingly enough, liquidations are not too excessive for the current price action, and shorts who were liquidated were quickly replaced with leveraged longs.”

The open interest, or the number of outstanding contracts, for perpetual Bitcoin futures has seen a noticeable increase, Newhouse said. At the same time, short positions have been forced to be closed in the latest rally. That may be the result of fresh long positions in the market, he said.

Adding to the optimism around Bitcoin was another large purchase of the tokens by MicroStrategy Inc. The enterprise software firm, which has made buying Bitcoin as part of its corporate strategy, said Monday that it purchased another 3,000 or so of the cryptocurrency tokens this month for $155.4 million. It owns about $10 billion in Bitcoin.

Shares of MicroStrategy jumped around 14%, while other crypto-relate stocks also rallied. Coinbase Global rose 14% and Bitcoin miner Marathon Digital jumped almost 20%.

Other cryptocurrencies followed suit, with tokens for Solana and Poly each rising more than 5%. Ether, the second-biggest digial asset, gained about 2%.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin climbs 22%, reclaims $1 trillion crown

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bitcoin is riding high.

The world’s largest cryptocurrency has leapt 22% this year to $52,005, pushing it past a market value of $1 trillion mark for the first time since its record heyday of late 2021.

Its resurgence has electrified the broader cryptocurrency market, including ether and other digital coins, which has now exceeded $2 trillion, as per data from CoinGecko.

The sector has been bolstered by the US regulatory approval of several spot bitcoin exchange-traded funds (ETFs), from BlackRock and Fidelity among others, which allow access to the crypto coin vis regular stock exchanges.

The US spot ETFs added 60,000 bitcoin in the first month of their launch, more than twice the miner production in the same period, brokerage Bernstein said.

“The amount of flows far outstrips anyone’s expectation,” said Mark Connors, head of research at Canada’s 3iQ Corp.

Crypto trading volumes are also robust.

Total spot trading volumes on centralized exchanges rose 4.4% to $1.4 trillion in January, recording the fourth consecutive monthly increase and the highest reading since June 2022, a report by London-based researcher CCData said.

The resurgence of interest helped the largest listed crypto exchange Coinbase Global post its first quarterly profit in two years last week .

“The bitcoin appreciation is contributing to better spot bitcoin ETF flows, which is in turn driving bitcoin prices higher, and pulling other tokens higher as well,” JPMorgan analysts said.

$150,000 Bitcoin in 2025?

Many industry watchers say the outlook is looking bright at the moment, with investors buying bitcoin ahead of the blockchain’s “halving” – a preplanned process that reduces mining rewards in half every four years – due in April.

Gautam Chhugani, analyst at Bernstein, expects 2024 to be a break-out year for cryptocurrencies where bitcoin hits all-time highs followed by a peak of $150,000 by mid-2025.

“This optimistic outlook is bolstered by the expectation of an upcoming halving event and the possibility of interest-rate reductions,” CCData analysts said.

While bitcoin remain 32% away from its record high of $69,000, it notched an all-time high against the Japanese yen at 7,919,000 yen last week.

Beware Greedy correction

It’s not all crypto high-fives: There are some signs the market is being by investors driven by FOMO.

CoinGlass’ Crypto Fear & Greed Index, a scale of 0 to 100 where zero denotes “extreme fear” and 100 signals “extreme greed”, hovered at 72. Usually when investors get too greedy, it signals the market is due for a correction.

Riskier assets such as bitcoin could be threatened by persistently high interest rates; traders’ have pushed back bets of a rate cut to June from March following a string of strong US economic data.

“While we remain bullish with liquidity rushing back into risk assets, inflation being sticky over 3% remains a downside risk and would also mean increased volatility across markets,” analysts at crypto trading firm QCP Markets said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow