Jakub Porzycki | Nurphoto | Getty Images
Bitcoin extended recent gains and climbed to another record high to start the week.
The price of the iconic cryptocurrency was last seen 3% higher at $72,022.16, according to Coin Metrics. Earlier, it hit an all-time high of $72,750.16.
Last week, bitcoin hit new records in volatile trading for the first time since 2021, ahead of more subdued trading over the weekend.
Bitcoin sets another record, ether climbs to December 2021 high
Inflows into US spot bitcoin ETFs continue to drive the cryptocurrency’s price action. Last week, crypto investment products saw record inflows totaling $2.7 billion, according to CoinShares. That put the year-to-date total at $10.3 billion, just short of the $10.6 billion record for all of 2021.
At the same time, increased leverage in the crypto market has led to the biggest price swings in nearly a year, with funding rates at their highest levels since January 2021 and open interest in bitcoin at an all-time high.
In the meantime, ether broke $4,000 for the first time since December 2021, boosted in part by bitcoin. It was last 3% higher at $4,034.00.
Investors are also looking ahead to the Ethereum network’s next big technological upgrade, called “Dencun,” this week. In the past, the crypto asset has risen up until the day of the upgrade and then seen traders sell on the event.
Citi analyst Alex Saunders pointed out in a note on Monday that price action could be different for Dencun given the strength of other key crypto catalysts at play right now – namely, inflows into bitcoin ETFs, the upcoming Bitcoin halving and the potential that the Securities and Exchange Commission could approve spot ether ETFs trading in the US in May.
Companies whose performance is linked to the price of bitcoin were mixed on Monday. Crypto exchange Coinbase The advanced gave back earlier gains but closed slightly lower as the broader rally in technology faltered. Bitcoin proxy Microstrategy rose 4% after the company bought another roughly 12,000 bitcoins for more than $821 million in cash, according to a filing.
The miners fell. Marathon Digital lost 12%, CleanSpark fell 16%, Iris Energy lost 5% and Riot Platforms slipped 4%. These were some of the biggest gainers on the stock market in February, but have fallen for March as investors digest the upcoming Bitcoin halving event, when mining companies’ revenues will decrease.
New UK Cryptocurrency Trading Products
Elsewhere, the U.K.’s Financial Conduct Authority said Monday it will allow exchanges to list exchange-traded products linked to cryptocurrencies for the first time — two months after spot bitcoin ETFs began trading in the U.S.
Specifically, the FCA said it would not oppose requests from recognized investment exchanges to set up a UK market for crypto-backed exchange-traded notes or ETNs. The London Stock Exchange has announced that it will accept applications to accept bitcoin and ether ETN from the second quarter of this year.
Unlike an ETF, which is a fund that owns assets, an ETN is an unsecured debt security issued by a bank. It is usually linked to a market index or other benchmark. An ETN promises to pay at maturity the full value of the index, less management fees.
Bitcoin bulls note that this will lead to increased institutional investment in bitcoin and other cryptocurrencies. They say this, in turn, will positively affect the price as more serious money floods the market.