Bitcoin (BTC-USD) rose above $60,000 on Wednesday, putting it within striking distance of an all-time high, as enthusiasm for the world's largest cryptocurrency reaches a frenzy not last seen during the 2021 boom.
The digital asset rose to $63,900, touching its highest intraday point since November 2021, before falling back to the $60,000 level amid reports that some users of cryptocurrency exchange Coinbase (COIN) began showing a $0 balance in their accounts.
Coinbase first said on its website that “we realize that some users may see a zero balance across their Coinbase accounts and may experience errors buying or selling” but that “your assets are safe.”
It later stated, “We are starting to see an improvement in customer trading. Due to increased traffic, some customers may still see errors in logging in, sending, receiving, and in some payment methods. Rest assured that your funds are safe.”
Its CEO Brian Armstrong also tried to reassure customers. In a post on
Later in the day he said “the apps are now recovering” and wrote that the increase in traffic exceeded what the company had “experienced.”
Applications are now recovering.
We modeled and tested an approximately 10x traffic increase. This exceeded this number.
Keeping services redundant is expensive, but we will need to continue working on auto-scaling solutions, eliminating any remaining bottlenecks. Thank you for… https://t.co/JXVppV57AF
– Brian Armstrong 🛡️ (@brian_armstrong) February 28, 2024
Before prices fell amid the Coinbase chaos, the rally was approaching Bitcoin's all-time high of $68,789. That peak came in November 2021, six months before the stunning collapse in 2022.
“Ultimately, what we're seeing is that cryptocurrencies will kind of rise from the ashes of the 2022 market,” said Ryan Rasmussen, a senior crypto research analyst at Bitwise Asset Management.
Bitcoin is riding a wave of excitement sparked by a series of Bitcoin exchange-traded funds that began trading in January. These funds gave ordinary investors broad exposure to digital assets, sparking expectations of a new rally.
“Our assumption is that Bitcoin will reach $125,000 by the end of 2025,” Benchmark's Mark Palmer added on Yahoo Finance Live.
Investors are bidding up other cryptocurrencies and related stocks as well. Year-to-date, the second-largest cryptocurrency, Ether (ETH), has outperformed Bitcoin by more than 4%, while the total market cap of all crypto assets has risen nearly 34% to $2.22 trillion, according to Coinmarketcap.
One sign of the growing enthusiasm for Bitcoin is trading activity in Bitcoin ETFs launched in January. It had recorded net inflows of more than $6.7 billion as of Wednesday, according to data compiled by London-based fund Farside Investors.
So far this quarter, Bitcoin trading volume has exceeded levels seen for the same period in each quarter of 2023.
This activity has been a boon for major cryptocurrency trading venues, including Coinbase and Robinhood (HOOD).
But the spike in trading also became a burden for Coinbase Wednesday as some of its users began reporting that their account balances showed $0.
Coinbase stock fell in intraday trading as it provided updates on its efforts to resolve the issue and closed roughly flat for the day.
We understand that some users may see a zero balance across their Coinbase accounts and may experience errors buying or selling. Our team is investigating this matter and will provide an update soon. Your assets are safe.
You can track this incident at https://t.co/a3pl4WiDhZ— Coinbase Support (@CoinbaseSupport) February 28, 2024
Other bitcoin-related stocks also rose. Shares of bitcoin miner Marathon Digital (MARA) and bitcoin holder Microstrategy (MSTR) are up 35% and 40% since the beginning of the year. MicroStrategy announced on Monday morning that it had acquired an additional 3,000 BTC, bringing its total investment to 193,000 BTC and valued at more than $11.8 billion as of Wednesday.
Derivatives traders are also now riding high on Bitcoin, according to Cumberland Labs analyst Christopher Newhouse.
There are nearly $25 billion worth of open contracts in the bitcoin futures market, according to cryptocurrency derivatives data provider Coinglass. This is a new high for premium bets on Bitcoin futures, surpassing the mark last set in April 2021.
“In the options market, the narrative is clear,” Newhouse added. “People are optimistic.”
David Hollerith is a senior reporter at Yahoo Finance covering banking, cryptocurrency, and other areas of finance.
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