Bitcoin hit a record high of about $68,800 on Tuesday, marking a remarkable comeback for the volatile cryptocurrency after its value plunged in 2022 amid a market meltdown. The price surge has been fueled by investor enthusiasm for a new financial product tied to the digital coin, as well as the approval of exchange-traded funds (E.T.F.s) by U.S. regulators.
Since November 2022, Bitcoin’s price has risen more than 300 percent, a resurgence that few predicted when the price dropped below $20,000 in 2022. This recent surge has been driven by the authorization of E.T.F.s that track Bitcoin’s price, providing a simple way for people to invest in the crypto markets without directly owning the virtual currency.
As of last week, investors had poured more than $7 billion into these investment products, propelling Bitcoin’s rapid rise. The price of Ether, the second-most-valuable digital currency after Bitcoin, has also seen an increase this year, partly due to the prospect of regulators approving an E.T.F. tied to Ether.
Despite the euphoria surrounding the recent price surge, the crypto industry is still navigating the aftermath of the 2022 crash. Prominent figures in the industry, such as Sam Bankman-Fried, the founder of the collapsed FTX crypto exchange, are facing legal challenges. The Securities and Exchange Commission has sued several crypto firms, including Coinbase, alleging that they offer unregistered securities.
While some skeptics remain unconvinced of the real-world utility of digital currencies, advocates believe that the approval of Bitcoin E.T.F.s will bring billions of dollars in new investment to the industry. The upcoming “halving” event, which will decrease the amount of new Bitcoin entering circulation, is also expected to drive up the price of the cryptocurrency.
Overall, the recent record high for Bitcoin signals a new phase of growth and stability for the cryptocurrency industry, with the potential for further gains in the future.
