The price of Bitcoin surged past $66,000 to an all-time high on Wednesday after Tuesday’s debut of the first-ever U.S. Bitcoin futures exchange-traded fund, which marked a “watershed moment” in the rise of cryptocurrencies toward mainstream acceptance.
Stakeholders said on Twitter that its price may keep rising.
“We’ve entered the next price era,” tweeted Dan Morehead, CEO of Pantera Capital. “The last time #bitcoin retook its ATH, it went 3.2x above that. The average increase of the past three instances – 8.8x over a 166-day period.”
“Bears are in shambles,” tweeted Dylan LeClair, co-founder of 21stParadigm.
Bitcoin was trading at $66,759 as of this writing, and reached as high as $66,999 after its previous all-time high of $64,889 on April 14, according to CoinDesk.
Bitcoin’s price started going parabolic on Thursday Oct. 14, spiking higher than $59,000 after people familiar with the matter reported that the U.S. Securities and Exchange Commission was expected to approve this week the first-ever Bitcoin futures exchange-traded fund product.
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Here are the two main factors on why Bitcoin’s price keeps climbing:
ProShares Bitcoin Strategy ETF BITO, the first Bitcoin-linked ETF, had the second largest ever debut for an ETF, reflecting huge interest in the crypto sector. It will offer people a new way to gain exposure to Bitcoin via brokerage accounts.
ProShares mainly invests in Bitcoin futures contracts, which bet on the future prices of Bitcoin instead of the cryptocurrency itself. The ETF was trading mid-morning Wednesday at $43.8, up 4.3 percent from its Tuesday close.
ProShares is the eighth-largest ETF provider by assets, according to ETDB.com. The firm is known for its funds that use leverage to track moves in certain indexes multiplied by a certain amount, CNBC reported.
Institutional investors such as Jack Dorsey’s Payments company Stripe have helped bring acceptance of Bitcoin into the mainstream. Stripe supports millions of digital storefronts and is assembling a crypto engineering team to plan its future and strategy in digital assets.
Stripe made headlines in 2014 when it supported bitcoin – a first in the industry, then abandoned that service four years later. But Stripe never left crypto, a source told CoinDesk. The company continued to watch the digital assets space develop and consider how to participate again. Stripe has recently shown increasing interest in non-fungible tokens (NFTs), the source said.
It has taken years for an ETF that tracks Bitcoin or one underpinned by Bitcoin derivatives to come to market, partly because the No. 1 cryptocurrency in the world by market cap remains largely unregulated. The SEC has hesitated until now to allow an ETF “focused on the new and largely untested cryptocurrency market to make its way to the public.”
A series of developments in Washington, D.C. may have helped drive the Bitcoin price rally. U.S. Federal Reserve Chairman Jerome Powell said during a House Financial Services Committee meeting on Sept. 30 that he does not intend to ban cryptocurrencies. On Oct 5, Securities and Exchange Commission chairman Gary Gensler mirrored Powell’s message in a hearing of the House Financial Services Committee, saying he has no plans to ban cryptocurrency — such a ban would be up to Congress.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?