Bitcoin soared to an all-time high on Monday, surpassing $71,000 as the momentum behind the world’s largest cryptocurrency continued unabated.
The Financial Conduct Authority (FCA) of Britain joined a growing list of regulators allowing digital asset trading products, announcing its decision to permit recognised investment exchanges to launch crypto-backed exchange-traded notes.
In European trading, Bitcoin surged by up to 4.8%, reaching a historic high of $71,677, marking a staggering 70% increase in gains for the year so far.
The surge in Bitcoin’s value has been attributed to a surge in investment flowing into new spot bitcoin exchange-traded funds and expectations of a potential interest rate cut by the Federal Reserve.
According to data from LSEG, capital flows into the 10 largest U.S. spot bitcoin exchange-traded funds slowed to a two-week low in the week ending March 8, but still totalled almost $2 billion.
“Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it,” remarked DailyFX strategist Nick Cawley.
The upcoming halving event in April, which will reduce the rate at which new supply is released into circulation, is also contributing to the bullish sentiment surrounding Bitcoin.
Cawley noted, “News also out earlier that the LSE plans to accept applications for bitcoin and ethereum ETNs in Q2 may have also helped today’s push higher.”
However, the FCA cautioned that crypto exchange-traded notes (ETNs) pose risks to retail investors, stating that such products would only be available for professional investors.
Despite the warnings, demand for Bitcoin is growing across the investment community, with asset managers holding the largest bullish position in bitcoin futures on record, according to weekly data from the U.S. Commodity Futures Trading Commission.
In addition to Bitcoin’s rally, Ethereum also saw gains, rising by 2.1% to approach $4,000, marking its highest level in two years. Speculation surrounding the potential approval of spot ether ETFs by U.S. regulators this year has contributed to Ethereum’s price surge, which has seen a 75% increase since the beginning of the year.
Ozioma Samuel-Ugwuezi
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