The most popular cryptocurrency traded at more than $69,000 earlier in the day — breaking the $68,000 record set in November 2021 — but was at $63,000 by late in the afternoon.
“Given that nearly everyone who has ever bought bitcoin is now in profit, there are decent odds we see some amount of profit taking,” Zaheer Ebtikar, founder of crypto fund Split Capital, told Bloomberg News.
The price of bitcoin has been climbing steadily in recent weeks, crossing $50,000 and then $60,000, and marking a comeback story for a currency that had dropped 64% in value in 2022.
This is thanks in part to thanks in part to the launch of bitcoin exchange traded funds (ETFs) in the U.S. These funds let everyday investors purchase bitcoin via brokerage accounts.
“Smaller investors are also returning to crypto, though with less enthusiasm than they had in the past,” PYMNTS wrote recently. “These everyday crypto enthusiasts, who lost billions when the markets plummeted in 2022, could be returning to the space in the wake of last month’s launch of U.S. ETFs investing directly in bitcoin.”
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Other crypto enthusiasts say the rally is being driven by bitcoin’s pending “halving,” a change that occurs every four years and reduces the number of coins that can be unlocked by crypto miners by half, potentially reducing supplies.
Meanwhile, PYMNTS argued in a report last month that while the crypto sector might have moved past recent high-profile criminal cases, crypto itself still hadn’t proved itself to be a reliable financial system.
Even though his agency approved bitcoin ETFs earlier this year, Security and Exchange Commission Chairman Gary Gensler sounded a note of caution.
“Though we’re merit neutral, I’d note that … bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion and terrorist financing,” he wrote.
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
