The cryptocurrency Bitcoin rose to an unprecedented level today, Tuesday, driven by a surge of funds into its exchange-traded funds in the United States and the potential for declining global interest rates. The price of the largest cryptocurrency in the world reached an all-time high of $69,202, surpassing its previous peak of $68,999.99 in November 2021. Investors' interest in the cryptocurrency has increased since the U.S. Securities and Exchange Commission approved eleven Bitcoin exchange-traded funds in late January.
Bitcoin's rapid ascent of approximately 160% since October, including 44% in February alone, sharply contrasts with the trend of 2022, when the cryptocurrency market faced a tough 18-month period, marred by a series of bankruptcies of prominent companies and scandals. In addition to growing demand from a wide range of investors, Bitcoin and the broader cryptocurrency market received a boost following news of the potential for the Federal Reserve to lower interest rates in the United States, which often prompts investors to shift capital into higher-yielding assets.
Investors have intensified trading in cryptocurrencies, major tech stocks, and investment-grade corporate bonds this year. The supply of Bitcoin is currently capped at 21 million, of which 19 million have already been mined. Despite its robust return to prominence, Bitcoin is still considered highly volatile by many investors and lacks sufficient real-world applications to become less affected by speculation.
