Bitcoin price recently surpassed $69,000, but it did not manage to sustain it for long as many traders took the chance to lock in some profit.
Bitcoin Price Update
At 10 am in New York, the token increased to $69,191.95 before quickly dropping by 14% to $59,317.16.
Zaheer Ebtikar, Founder of the Crypto Fund Split Capital, recently said that since everyone who bought Bitcoin is now making a profit, there is a good chance that people will start selling to take their gains.
On Tuesday, the Bitcoin price experienced many ups and downs, showing how volatile the cryptocurrency can be. The recent rise was mainly due to the increase in hopeful bets in the derivatives market, where investors could get leverage up to 100 times their position size in products like perpetual futures.
As the price of Bitcoin retreats, over $800 million worth of optimistic positions were closed in the perpetual futures market, according to the data released by the crypto data tracker Coinglass.
The Bitcoin price has seen a good comeback this year due to the high interest in new US exchange-traded funds and the possibility of a slowdown in its supply growth. Before Bitcoin retreats on Tuesday, the cryptocurrency had increased by 63% in 2024, going over the global stocks and increasing hope in the digital asset market.
Bitcoin’s comeback can be due to the US Securities and Exchange Commission, a regulator often seen as unfriendly to crypto. The SEC approved spot Bitcoin exchange-traded funds in January, which was surprising because the SEC gave Bitcoin a legal setback last year in its bid to block them.
The rise in Bitcoin’s price is primarily due to its approval for exchange-traded funds, making it more accessible to the public. This has caused a turning point in the crypto industry after a downturn experienced in 2022 and several notable bankruptcies, such as Sam Bankman-Fried’s FTX exchange collapse.
Companies like BlackRock Inc. And Fidelity Investments have been constantly pouring money into Bitcoin exchange-traded funds (ETFs). It has been reported that these companies invested nearly $8 billion in under two months.
This time falls at the same time as that of the upcoming reduction in Bitcoin’s supply growth, also known as the halving.
Investors View on the Bitcoin’s Retreat
Stefan van Haenisch, Head of Trading at OSL SG Pte, said that due to the all-time highs of the Bitcoin Price along with the spot ETFs and the upcoming halving, people might buy more of the cryptocurrency particularly, particularly those who have been on the sidelines watching the markets and are suffering FOMO.
The Bitcoin comeback that happened in early 2023 has pushed the total market value of digital assets to around $2.6 trillion. This recovery from a low in November 2022 marks a significant turnaround for the industry.
The Bitcoin price reached a high of $68,991.85 on Nov. 10, 2021, due to the global government’s stimulus measures in response to COVID-19. The Bitcoin price also increased as more crypto enthusiasts started holding stocks, or “hold on for dear life” or HODL stocks.
After reaching its peak in 2021, the Bitcoin price and the overall crypto market started decreasing as central banks became more cautious about reducing constantly rising inflation. By the end of 2021, the Bitcoin price had decreased by almost a third compared to its high.
During the bear market, the fraud and the risky behavior of the major companies present in the crypto industry were exposed. For example, the breakdown of the TerraUSD stablecoin and Bankman-Fried’s FTX exchange, as well as increased regulatory watch on Binance and its founder CZ Zhao.
Currently, Bankman-Fried and Zhao are awaiting sentencing in the US for criminal charges. Meanwhile, Do Kwon, the creator of TerraUSD, was imprisoned in Montenegro last year for using a fake passport and is fighting deportation to the US, where he is going to face fraud charges.
As the crypto market faced a lot of difficulties in 2022, regulators globally started increasing their efforts to make compliance more strict for first crypto companies.
For example, Dubai and Hong Kong introduced new regulations, the EU passed the MiCA legislation, and countries like Australia, India, and the UK increased efforts to prevent unlicensed crypto exchanges.
Even though important investors like Jamie Dimon of JPMorgan Chase & Co. and Charlie Munger of Berkshire Hathaway Inc. called Bitcoin a worthless asset, one of the world’s largest financial firms helped Bitcoin make its comeback in the market.
BlackRock submitted an application to the SEC for the iShares Bitcoin Trust to invest directly in the token on 15 June last year. This step was not the company’s first attempt. However, BlackRock’s significant size and influence as the largest ETF provider led many to believe that this time, the results would be different.
BlackRock’s ETF, also known as IBIT, was one of the first of its kind to be approved in early January. In less than two months, its assets have grown to over $10 billion, and the Bitcoin price has more than doubled since BlackRock applied for the ETF.
Nathan McCauley, CEO and co-founder of Anchorage Digital, said that the Bitcoin all-time high is a turning point for crypto. He added that traditional institutions that were once on the sidelines are now fully involved as the main drivers of the crypto bull market.