Bitcoin Hits New High, Surpassing $72K – Forbes Advisor INDIA

Bitcoin or BTC—the world’s largest cryptocurrency was hovering around the levels of $70,000 on March 12. BTC has surged surpassing its previous all-time highs and set a new record of $72,738 with a market capitalization of nearly $1.41 trillion.

The cryptocurrency’s Fear and Greed Index is in the zone of extreme greed. Bitcoin prices have skyrocketed to $72,738 setting a new all-time high record and surpassing its previous peaks. Bitcoin recently reached $72k even before the much-awaited Bitcoin Halving event, which is expected to take the cryptocurrency to unprecedented heights.

Bitcoin Price Hits 2-year High and Sets a New Record of $72,000

The Bitcoin price hits its new record of all-time high at $72,738 after two-year and the rise is provoked by the blooming interest in spot Bitcoin ETFs. According to the Farside Investors data, the ETFs have soared to an excellent level of $6.7 billion since the Securities and Exchange Commission gave the approval to them at the beginning of the year. These Bitcoin ETFs on average are alluring a daily inflow of around $332 million.

In the last few months, the surge has been triggered by institutional allocation and also increased retail participation due to spot Bitcoin ETF application in the U.S. and of course the upcoming Bitcoin Halving. Meantime, the surge coexists with a broader rally in the cryptocurrency market. ETH, too, has touched the level of $4,035.

Parth Chaturvedi, the investments lead at CoinSwitch Ventures, says tracking these flows should be a strong indicator of future price action, as increased demand along with the upcoming reduction in supply (due to the fourth halving) could result in upward price movement. 

However, retail participation is still nowhere close to the mania seen in 2021. “We can expect interest in crypto as an asset class to become more mainstream,” says Chaturvedi.

How Does the $678 Million Inflow into Bitcoin ETFs Affect Bitcoin’s Price?

The last month was brilliant for Bitcoin ETFs as they recorded an inflow of around $678 million by the end of the month. This massive inflow came because of the BlackRock iShares – ETF witnessing an inflow of $520 million alone. 

According to the BitMEX research data, the BlackRock iShare ETF is currently leading the Spot Bitcoin ETF inflow which witnessed a net inflow of around $678 million by the end of Feb. and it alone had around $520 million. Until launch, this happens to be the third-largest inflow, as all the nine spot Bitcoin ETFs gained huge trading volumes. The net inflow of the ETF hit over $6.5 billion and asset holdings hovered over 1,41,000 BTC. Fidelity Bitcoin ETF witnessed $126 million and Ark 21Shares a net inflow of $5.4 million. Other Spot ETFs also saw solid inflows, showcasing strong bullish sentiment among both institutional and retail investors.

On the other hand, Grayscale’s GBTC witnessed a $125.6 million outflow, an increase from $22.4 million outflow, giving up hopes of a standard shift.

After witnessing an exceptional price surge on March 11, 2024, BTC touched the level of $72k, setting a new all-time high record before Bitcoin halving. Subsequently, the Spot Bitcoin ETFs experienced a significant downturn, with the total net flow dropping from $678.67 million on Feb. 29 to $332.08 million on March 7, 2024, as reported by “The Block.”

With BTC continuously surpassing its all-time high, investments of large institutional players like BlackRock and MicroStrategy appear to be paying off.

Let’s have a look at the current portfolios

MicroStrategy, a business intelligence firm, has impressively expanded its digital assets portfolio, surpassing BlackRock. BlackRock presently holds 197,943 BTC, while MicroStrategy has accumulated 205,000 BTC valued at approximately $821.7 million.

FCA – Crypto Asset Exchange Traded Notes for Professional Investors

On Monday, the UK’s financial watchdog announced that they would now allow recognized investment exchanges to launch crypto-backed exchange-traded notes (cETNs), becoming the latest regulator to pave the way for digital assets.

The Financial Conduct Authority (FCA) specified that these products would be available only for professional investors, such as credit institutions and investment firms authorized to operate in financial markets. However, the FCA cautioned that cETNs, bonds issued by financial institutions tracking the performance of underlying assets, could potentially pose harm to retail investors.

The FCA stated that exchanges must continue to ensure sufficient controls are in place, making it affordable for professional investors to trade in an orderly and properly protected manner. cETNs must meet all the conditions of the UK listing regime, including ongoing disclosure and prospectuses. The FCA believes that cETNs and crypto derivatives are inappropriate 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 FCA continues to remind investors that digital assets are highly risky and largely unregulated.

BTC Hitting $72,000 – Is This a Sign of a Bull Run or a Bull Trap?

The surge in Bitcoin prices and its hitting its new all-time high at $72,738 after two years is a sign of a bull run or a bull trap, investors should be cautious. Bitcoin is trading tremendously well, some traders think it’s a bull trap and some have an optimistic approach towards the BTC surge.

The cryptocurrency market is doing brilliantly, but investors need to be careful as sudden pumps can also be a possibility of a bull trap. There are many reasons for the BTC to surge even more and set a new all-time high record. Some of the reasons are Spot Bitcoin ETFs, Bitcoin Halving and ETH Dencun upgrade.

The last time the BTC price was above $57,000 was in the year 2021, when the price peaked and was beginning its reversal into a prolonged bear market. By the start of the year 2022, the price had sunk to $32,987, almost a 42% decline. The current market shows the same similarities and thus can be a bull trap. Forbes Advisor India suggests investors be careful while trading in BTC.

Bottom Line

The overexcitement around the U.S. approval of a Bitcoin Futures ETFs has hyped optimism across the crypto industry. This has extensively opened doors for investors to jump on to the BTC bandwagon, driving the prices and demand higher. 

This is a good opportunity for investors to take advantage of the Bitcoin surge as it is driven by the Bitcoin halving event and the ETH Dencun upgrade but only with extreme caution. As we all know, the crypto market is highly unpredictable and history testifies BTC is utterly volatile with past price movements reflecting BTC prices falling more than a third in value. The current surge could just be a conceited bull trap, no one can be sure.