Bitcoin reaches new high, surpassing $72,000 – Forbes India Advisor

Bitcoin or BTC – The world’s largest cryptocurrency was hovering around $70,000 levels on March 12. BTC soared past its previous all-time highs and set a new record high of $72,738 with a market cap of about $1.41 trillion.

The Cryptocurrency Fear and Greed Index falls into the extreme greed zone. Bitcoin prices rose to $72,738, setting a new all-time record and surpassing previous peaks. Bitcoin recently reached $72,000 even before the long-awaited Bitcoin halving event, which is expected to take the cryptocurrency to unprecedented levels.

Bitcoin price hits 2-year high and hits new record high of $72,000

The price of Bitcoin reached an all-time high of $72,738 two years later, and the rise was caused by growing interest in Bitcoin exchange-traded funds. According to data from Farside Investors, ETFs have soared to a stellar $6.7 billion since the Securities and Exchange Commission approved them at the beginning of the year. Bitcoin ETFs attract an average daily inflow of about $332 million.

In the past few months, the rally has been driven by institutional allocation and also increased retail participation due to the implementation of the spot Bitcoin ETF in the US and of course the upcoming Bitcoin halving. At the same time, this rise coincides with a broader rally in the cryptocurrency market. ETH also reached the $4,035 level.

Tracking these flows should be a strong indicator of future price movement, as increased demand combined with an upcoming decline in supply (due to the fourth halving) could lead to upward price movement, says Parth Chaturvedi, investment lead at CoinSwitch Ventures.

However, retail participation is still a far cry from the mania we saw in 2021. “We can expect interest in cryptocurrencies as an asset class to become more widespread,” says Chaturvedi.

How does $678 million flow into Bitcoin ETFs affect Bitcoin price?

Last month was a great one for Bitcoin ETFs as they recorded an inflow of around $678 million by the end of the month. This massive inflow was due to the BlackRock iShares – ETF which saw an inflow of $520 million alone.

According to BitMEX research data, the BlackRock iShare ETF currently leads the flow of the Spot Bitcoin ETF which saw a net inflow of about $678 million by the end of February, and it alone had about $520 million. Until launch, this was the third largest inflow, with all nine Bitcoin ETFs gaining huge trading volumes. The net inflow of ETFs was over USD 6.5 billion, and asset holdings hovered around 1,41,000 BTC. The Fidelity Bitcoin ETF saw $126 million, and Ark 21Shares saw a net inflow of $5.4 million. Other spot ETFs also saw strong inflows, showing strong bullish sentiment among institutional and retail investors.

On the other hand, Grayscale's GBTC saw an outflow of $125.6 million, up from an outflow of $22.4 million, dashing hopes of a record turnaround.

After experiencing an exceptional price surge on March 11, 2024, Bitcoin reached the $72,000 level, setting a new all-time high before the Bitcoin halving. Spot Bitcoin ETFs then saw a significant decline, with total net inflow falling from $678.67 million on February 29 to $332.08 million on March 7, 2024, The Block reported.

With BTC continuing to surpass all-time highs, the investments of big institutional players like BlackRock and MicroStrategy appear to be paying off.

Let's take a look at the current portfolios

MicroStrategy, a business intelligence firm, has impressively expanded its digital asset portfolio, surpassing BlackRock. BlackRock currently holds 197,943 BTC, while MicroStrategy has amassed 205,000 BTC worth approximately $821.7 million.

FCA – Securities traded on a crypto asset exchange for professional investors

The UK Financial Regulatory Authority announced on Monday that it will now allow recognized investment exchanges to launch cryptocurrency-backed trading securities (cETNs), becoming the latest regulatory body to pave the way for digital assets.

The Financial Conduct Authority (FCA) has specified that these products will only be available to professional investors, such as credit institutions and investment companies licensed to operate in the financial markets. However, the FCA has warned that CETNs, which are bonds issued by financial institutions that track the performance of underlying assets, could pose a disadvantage to retail investors.

The Financial Supervisory Authority stated that exchanges must continue to ensure that adequate controls are in place, making it easier for professional investors to trade in an appropriately regulated and protected manner. cETNs must meet all conditions of the UK listing regime, including ongoing disclosure and prospectuses. The FCA believes that cETNs and cryptocurrency derivatives are unsuitable for retail consumers due to the harm they pose.

As a result, the ban on the sale of CETNs to retail consumers remains in place. The Financial Conduct Authority (FCA) continues to remind investors that digital assets are highly risky and largely unregulated.

BTC hits $72,000 – is this a bullish sign or a bull trap?

The rise in Bitcoin prices reaching a new all-time high of $72,738 after two years is a sign of a bull run or a bull trap, and investors should be careful. Bitcoin is trading very well, some traders believe it is a bull trap, others have an optimistic approach towards Bitcoin's rise.

The cryptocurrency market is doing great, but investors should be careful because sudden pumps can also be a potential bull trap. There are many reasons why the price of Bitcoin could rise further and set a new all-time record. Some of the reasons are Spot Bitcoin ETFs, Bitcoin Halving, and ETH Dencun Upgrade.

The last time Bitcoin surpassed $57,000 was in 2021, when the price peaked and began its reversal in a long-term bear market. By the beginning of 2022, the price had dropped to $32,987, an almost 42% drop. The current market shows the same similarities and therefore can be a trap for bulls. Forbes Advisor India suggests investors should be careful while trading in BTC.

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Excessive excitement over US approval of Bitcoin futures ETFs has fueled optimism across the cryptocurrency industry. This has opened the doors wide for investors to jump on the Bitcoin bandwagon, resulting in higher prices and demand.

This is a good opportunity for investors to take advantage of Bitcoin's rise as it is driven by the Bitcoin halving event and ETH Dencun upgrade but with extreme caution. As we all know, the cryptocurrency market is highly unpredictable and history sees Bitcoin being quite volatile with previous price movements reflecting Bitcoin prices falling by more than a third of its value. The current rally may just be an ego trap, and no one can say for sure.