The price of bitcoin hit a fresh all-time high for the first time in more than six months Wednesday morning, as investors rallied around the blockbuster debut of the first-ever bitcoin futures exchange-traded fund.
The price of bitcoin jumped more than 4% to $66,140 on Wednesday morning shortly before 10 a.m. EDT, surpassing a record high of about $64,800 set on April 14, according to crypto data website CoinGecko.
With the latest boost, bitcoin prices have now skyrocketed nearly 20% over the past week amid fervor for the debut of the ProShares Bitcoin Strategy ETF, which posted roughly $1 billion in volume and rose 4.7% during its first day of trading on Tuesday.
Launched on the New York Stock Exchange under the ticker BITO, the ProShares fund marks the first bitcoin-linked exchange-traded fund in the United States, making investing in bitcoin accessible to the six in ten Americans who own brokerage accounts but may not want to “go through the hassle and learning curve” of establishing an account with a cryptocurrency provider, ProShares CEO Michael L. Sapir says.
In a Wednesday morning note, Nigel Green, the CEO of $12 billion advisory DeVere Group, said the first Securities and Exchange Commission-approved bitcoin ETF should prove a “major test” to see if mainstream investors are ready to include cryptocurrencies in their portfolios alongside stocks and bonds, adding: “Judging by the reaction, that they are.”
Bitcoin’s market capitalization stands at nearly $1.3 trillion—nearly three times ether’s market value of $479 billion and a staggering 15 times the $84 billion market cap of binance coin, the world’s third-largest cryptocurrency.
Though he expects bitcoin’s unyielding volatility will continue despite the new highs, Green also said the momentum should help bring other crypto vehicles to market, thus driving sustained gains in bitcoin and other cryptocurrencies.
“ETFs offering crypto exposure can open the door to a whole new wave of crypto-curious investors,” Ally Invest chief investment strategist Lindsey Bell said in a Tuesday note, adding the funds offer low investment fees and could serve the interest of investors wary about the mechanics of buying and selling cryptocurrencies directly. Though she cautions the futures contracts could have increased volatility as they approach expiration, Bell adds: “Crypto is finding its footing as an investment vehicle, and the rollout of ETFs could be a big step in that direction.”
Bitcoin and the broader cryptocurrency market have soared to meteoric highs during the pandemic in light of inflationary concerns and increased institutional adoption, but prices started crashing in April, when Tesla—one of bitcoin’s biggest corporate investors—disclosed it sold a large portion of its holdings and wouldn’t buy more until bitcoin mining consumed less energy. Markets struggled to recover since then amid an intensifying regulatory crackdown in China, stemming in part from similar environmental concerns, but bitcoin’s resurgence has helped the nascent market eclipse its previous highs. The combined market value of the world’s cryptocurrencies hit $2.7 trillion on Wednesday—surpassing a previous peak of $2.6 trillion in mid-May.
The price of bitcoin has surged roughly 450% over the past year.
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